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The Project Report

On
KOTAK MAHINDRA BANK
Titled
Banking Activities, Loans, Account, Deposits & Customer
Satisfaction
Submitted in partial fulfillment for the
Award of Degree of
Master of Business Administration

SUBMITTED BY:

SUBMITTED TO:

JITENDRA SINGH

Dr. Pankaj Gupta

MBA IV SEM

(HOD)

APEX INSTITUTE OF MANAGEMENT & SCIENCE, JAIPUR


2012-2014

Guides Certificate
This is to certify that Mr. Jitendra Singh has submitted his project titled Banking
Activities, Loans, Accounts, Deposits & customers satisfaction on the given due
date. During his work, he was found to be a competent and hard working student. I wish
him all the best for the future endeavours.

DR. PANKAJ GUPTA


(HOD)

APEX INSTITUTE OF MANAGEMENT & SCIENCE,


JAIPUR

Student Declaration
I here by declare that the project report entitled Banking Activities, Loans,
Accounts, Deposits& Customer Satisfaction Submitted in partial fulfillment and
requirement for the degree of Master of Business Administration to Rajasthan
technical University, India is my original work and not submitted for the award of any other
degree, diploma, fellowship, or any similar title of prizes.

Place : Jaipur

Jitendra Singh

Date :

MBA sem. IV

PREFACE
This project was challenging as it was my first opportunity to do an individual project in a
real working environment. I choose to do this project in KOTAK MAHINDRA Bank Ltd.,
Jaipur in order to get professional insight about the banking products and loan policy.
KOTAK MAHINDRA Bank offers a wide range of banking products and financial services
through a variety of delivery channels and through its specialized subsidiaries and
affiliates in the areas of investment banking, venture capital and asset management.
My project was to prepare a report on Banking activities, Loans, Accounts &
Deposits of KOTAK MAHINDRABANK and other private sector banks. My project
demanded following activities to be done:
1. To meet customer and understand the operations.
2. To compile the clients fleet list, details of major customers, details of financers etc.
3. detailed study on business banking Industry
The Indian banking industry is passing through a phase of customers market.

competition has been established within the banks operating in India. With stiff
competition and advancement of technology, the services provided by banks have
become more easy and convenient.
The objective of the study at M.K BANK was to understand the practices and procedures
followed at the branch banking level. It was very beneficial as I not only understood the
products and services offered by the industry, but also dealt with issues like cross selI.

ACKNOWLEDGEMENT

I express my sincere thanks to my project guide, Dr. Pankaj Gupta for guiding me right
from the inception till the successful completion of the report. I sincerely acknowledge her
for extending their valuable guidance and support for literature and critical reviews of
project and the report and above all the moral support he had provided to me with all
stages of this project.
I would like to thank the support given by the Mr. Nikhil Agrawal (A.S.M.) Mahindra Kotak
Bank, for their help and cooperation throughout our project.

JITENDRA SINGH
M.B.A. IV SEM

EXECUTIVESUMMARY
The commencement of E-Trading and Demat has transformed the capital market in India.
With the help of Demat and Trading account, buying and selling of shares has become a
much faster and even process than trading with the assistance of a physical broker. It
provides for the assimilation of bank, broker, stock exchange and depository participants.
This helps to get rid of the painstaking procedure of investing in stock exchange.
Previously, if one wants to invest in stock market, he has to contact a broker on phone or
Smeet him personally to place order.
A broker generally gives such importance and additional service only to high net worth
customers. But the introduction of Internet trading, even a common or a small investor
gets an opportunity to avail the service at an affordable price which is much lesser than
what is charged by a physical broker over the phone. Online trading has given customer
a real time access to account information, stock quotes elaborated market research and
interactive trading. The prerequisites of Internet trading are a computer, a modem and a
telephone connection, registration with broker, a bank a/c and depository account.

TABLE OF CONTENTS
S. NO.

Descriptions

Page no.

Introduction to the Industry

8-36

Introduction to the Organization

37-70

Research Methodology

71-72

3.1Title of the Study


3.2Duration of the Project
3.3Objective of the Study
3.4Types of Research
3.5Collection Method and Sample Size
6

Scope of Study

3.7Limitation of Study

Facts and Findings

73

Data Analysis and Interpretation

74-85

SWOT Analysis

86-87

Conclusion

88-89

Recommendation and Suggestion

90

Appendix

91-92

10

93
BIBLIOGRAPHY

INTRODUCTION OF THE INDUSTRY


Banking in India
Structure of the organized banking sector in India. Number of banks are in brackets.
Banking in India in the modern sense originated in the last decades of the 18th century.
The first banks were Bank of Hindustan (1770-1829) and The General Bank of India,
established 1786 and since defunct.
The largest bank, and the oldest still in existence, is the State Bank of India, which
originated in the Bank of Calcutta in June 1806, which almost immediately became the
Bank of Bengal. This was one of the three presidency banks, the other two being the
Bank of Bombay and the Bank of Madras, all three of which were established under
charters from the British East India Company. The three banks merged in 1921 to form
the Imperial Bank of India, which, upon India's independence, became the State Bank of
India in 1955. For many years the presidency banks acted as quasi-central banks, as did
their successors, until the Reserve Bank of India was established in 1935.
In 1969 the Indian government nationalized all the major banks that it did not already own
and these have remained under government ownership. They are run under a structure
know as 'profit-making public sector undertaking' (PSU) and are allowed to compete and
operate as commercial banks. The Indian banking sector is made up of four types of
banks, as well as the PSUs and the state banks, they have been joined since the 1990s
by new private commercial banks and a number of foreign banks.
Banking in India was generally fairly mature in terms of supply, product range and reacheven though reach in rural India and to the poor still remains a challenge. The
government has developed initiatives to address this through the State Bank of India
expanding its branch network and through the National Bank for Agriculture and Rural
Development with things like microfinance.
Indian Banking Industry currently employees 1,175,149 employees and has a total of
109,811 branches in India and 171 branches abroad and manages an aggregate deposit
of 67504.54 billion (US$1.1 trillion or 820 billion) and bank credit of 52604.59 billion
8

(US$880 billion or 640 billion). The net profit of the banks operating in India was
1027.51 billion (US$17 billion or 12 billion) against a turnover of

9148.59 billion

(US$150 billion or 110 billion) for the fiscal year 2012-13.


History
In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC).[2][3]
Later during the Maurya dynasty (321 to 185 BC), an instrument called adesha was in
use, which was an order on a banker desiring him to pay the money of the note to a third
person, which corresponds to the definition of a bill of exchange as we understand it
today. During the Buddhist period, there was considerable use of these instruments.
Merchants in large towns gave letters of credit to one another.[4]
Colonial era
During the period of British rule merchants established the Union Bank of Calcutta in
1829, first as a private joint stock association, then partnership. Its proprietors were the
owners of the earlier Commercial Bank and the Calcutta Bank, who by mutual consent
created Union Bank to replace these two banks. In 1840 it established an agency at
Singapore, and closed the one at Mirzapore that it had opened in the previous year. Also
in 1840 the Bank revealed that it had been the subject of a fraud by the bank's
accountant. Union Bank was incorporated in 1845 but failed in 1848, having been
insolvent for some time and having used new money from depositors to pay its dividends.
[5]

The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint
Stock bank in India, it was not the first though. That honour belongs to the Bank of Upper
India, which was established in 1863, and which survived until 1913, when it failed, with
some of its assets and liabilities being transferred to the Alliance Bank of Simla.
Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoird
Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862;
branches in Madras and Pondicherry, then a French possession, followed. HSBC
established itself in Bengal in 1869. Calcutta was the most active trading port in India,
mainly due to the trade of the British Empire, and so became a banking centre.
9

The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in
1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in
Lahore in 1895, which has survived to the present and is now one of the largest banks in
India.
Around the turn of the 20th Century, the Indian economy was passing through a relative
period of stability. Around five decades had elapsed since the Indian Mutiny, and the
social, industrial and other infrastructure had improved. Indians had established small
banks, most of which served particular ethnic and religious communities.
The presidency banks dominated banking in India but there were also some exchange
banks and a number of Indian joint stock banks. All these banks operated in different
segments of the economy. The exchange banks, mostly owned by Europeans,
concentrated on financing foreign trade. Indian joint stock banks were generally under
capitalised and lacked the experience and maturity to compete with the presidency and
exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it
seems we are behind the times. We are like some old fashioned sailing ship, divided by
solid wooden bulkheads into separate and cumbersome compartments."
The period between 1906 and 1911, saw the establishment of banks inspired by the
Swadeshi movement. The Swadeshi movement inspired local businessmen and political
figures to found banks of and for the Indian community. A number of banks established
then have survived to the present such as Bank of India, Corporation Bank, Indian Bank,
Bank of Baroda, Canara Bank and Central Bank of India.
The fervour of Swadeshi movement lead to establishing of many private banks in
Dakshina Kannada and Udupi district which were unified earlier and known by the name
South Canara ( South Kanara ) district. Four nationalised banks started in this district
and also a leading private sector bank. Hence undivided Dakshina Kannada district is
known as "Cradle of Indian Banking".
During the First World War (19141918) through the end of the Second World War
(19391945), and two years thereafter until the independence of India were challenging
for Indian banking. The years of the First World War were turbulent, and it took its toll with
10

banks simply collapsing despite the Indian economy gaining indirect boost due to warrelated economic activities. At least 94 banks in India failed between 1913 and 1918 as
indicated in the following table:

Years
2008
2009
2010
2011
2012
2013

Number

of

that failed
12
42
11
13
9
7

banks Authorised
( Lakhs)
274
710
56
231
76
209

Capital Paid-up

Capital

( Lakhs)
35
109
5
4
25
1

Post-Independence
The partition of India in 1947 adversely impacted the economies of Punjab and West
Bengal, paralysing banking activities for months. India's independence marked the end of
a regime of the Laissez-faire for the Indian banking. The Government of India initiated
measures to play an active role in the economic life of the nation, and the Industrial Policy
Resolution adopted by the government in 1948 envisaged a mixed economy. This
resulted into greater involvement of the state in different segments of the economy
including banking and finance. The major steps to regulate banking included:

The Reserve Bank of India, India's central banking authority, was established in
April 1935, but was nationalised on 1 January 1949 under the terms of the Reserve
Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b). [6]

In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India".

The Banking Regulation Act also provided that no new bank or branch of an
existing bank could be opened without a license from the RBI, and no two banks
could have common directors.

Nationalization in the 1960s


Despite the provisions, control and regulations of the Reserve Bank of India, banks in
India except the State Bank of India (SBI), continued to be owned and operated by private
11

persons. By the 1960s, the Indian banking industry had become an important tool to
facilitate the development of the Indian economy. At the same time, it had emerged as a
large employer, and a debate had ensued about the nationalization of the banking
industry. Indira Gandhi, the then Prime Minister of India, expressed the intention of the
Government of India in the annual conference of the All India Congress Meeting in a
paper entitled "Stray thoughts on Bank Nationalization." [7] The meeting received the paper
with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an
ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance,
1969') and nationalised the 14 largest commercial banks with effect from the midnight of
19 July 1969. These banks contained 85 percent of bank deposits in the country.
[7]

Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke

of political sagacity." Within two weeks of the issue of the ordinance, the Parliament
passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The
stated reason for the nationalisation was to give the government more control of credit
delivery. With the second dose of nationalisation, the Government of India controlled
around 91% of the banking business of India. Later on, in the year 1993, the government
merged New Bank of India with Punjab National Bank. It was the only merger between
nationalised banks and resulted in the reduction of the number of nationalised banks from
20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%,
closer to the average growth rate of the Indian economy
Liberalization in the 1990s
In the early 1990s, the then government embarked on a policy of liberalization, licensing a
small number of private banks. These came to be known as New Generation tech-savvy
banks, and included Global Trust Bank (the first of such new generation banks to be set
up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed
Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the
economy of India, revitalised the banking sector in India, which has seen rapid growth
12

with strong contribution from all the three sectors of banks, namely, government banks,
private banks and foreign banks.
The next stage for the Indian banking has been set up with the proposed relaxation in the
norms for foreign direct investment, where all foreign investors in banks may be given
voting rights which could exceed the present cap of 10% at present. It has gone up to
74% with some restrictions.
The new policy shook the Banking sector in India completely. Bankers, till this time, were
used to the 464 method (borrow at 4%; lend at 6%; go home at 4) of functioning. The
new wave ushered in a modern outlook and tech-savvy methods of working for traditional
banks. All this led to the retail boom in India. People demanded more from their banks
and received more.
Current period
All banks which are included in the Second Schedule to the Reserve Bank of India Act,
1934 are Scheduled Banks. These banks comprise Scheduled Commercial Banks and
Scheduled Co-operative Banks. Scheduled Commercial Banks in India are categorised
into five different groups according to their ownership and/or nature of operation. These
bank groups are:

State Bank of India and its Associates

Nationalised Banks

Private Sector Banks

Foreign Banks

Regional Rural Banks.

In the bank group-wise classification, IDBI Bank Ltd. is included in Nationalised Banks.
Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and
Scheduled Urban Cooperative Banks.
13

Growth of Banking in India of Scheduled Commercial Banks[1]


Indicat 31 March of
2005
ors
Number

2006

2007

2008

2009

2010

2011

2012

2013

218

178

169

166

163

163

169

151

70,373

72,072

74,653

78,787

82,897

88,203

94,019

102,377

109,811

16

16

15

15

15

14

13

13

12

of
Comme 284
rcial
Banks
Number
of
Branch
es
Populati
on

per

Banks
(in
thousan
ds)
Aggreg
ate

17002
billion

21090
billion

26119
billion

31969
billion

38341
billion

44928
billion

52078
billion

59091
billion

67504.54
billion

Deposit (US$280 (US$350 (US$440 (US$530 (US$640 (US$750 (US$870 (US$990 (US$1.1 tri
s

billion)
11004

billion)
15071

billion)
19312

billion)
23619

billion)
27755

billion)
32448

billion)
39421

billion)
46119

llion)
52605

Bank

billion

billion

billion

billion

billion

billion

billion

billion

billion

Credit

(US$180 (US$250 (US$320 (US$390 (US$460 (US$540 (US$660 (US$770 (US$880 b


billion)

billion)

billion)

billion)

billion)

billion)

billion)

billion)

illion)

64%

69%

73%

77%

78%

78%

78%

79%

Deposit
as
percent
age

to 62%

GNP (at
factor
cost)
Per
Capita
Deposit
Per
Capita
Credit
Credit

16281

19130

23382

28610

33919

39107

45505

50183

56380

(US$270) (US$320) (US$390) (US$480) (US$570) (US$650) (US$760) (US$840) (US$940)


10752

13869

17541

21218

24617

28431

34187

38874

44028

(US$180) (US$230) (US$290) (US$350) (US$410) (US$470) (US$570) (US$650) (US$740)


63%

70%

74%

75%

74%

14

74%

76%

79%

79%

Growth of Banking in India of Scheduled Commercial Banks[1]


Indicat 31 March of
2005
2006
ors
Deposit

2007

2008

2009

2010

2011

2012

2013

Ratio

By 2010, banking in India was generally fairly mature in terms of supply, product range
and reach-even though reach in rural India still remains a challenge for the private sector
and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are
considered to have clean, strong and transparent balance sheets relative to other banks
in comparable economies in its region. The Reserve Bank of India is an autonomous
body, with minimal pressure from the government.
With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail
banking, mortgages and investment services are expected to be strong. One may also
expect M&As, takeovers, and asset sales.
In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in
Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has
been allowed to hold more than 5% in a private sector bank since the RBI announced
norms in 2005 that any stake exceeding 5% in the private sector banks would need to be
vetted by them.
In recent years critics have charged that the non-government owned banks are too
aggressive in their loan recovery efforts in connexion with housing, vehicle and personal
loans. There are press reports that the banks' loan recovery efforts have driven defaulting
borrowers to suicide.[8][9][10]
Adoption of banking technology
The IT revolution has had a great impact on the Indian banking system. The use of
computers has led to the introduction of online banking in India. The use of computers in
the banking sector in India has increased many fold after the economic liberalisation of
1991 as the country's banking sector has been exposed to the world's market. Indian
banks were finding it difficult to compete with the international banks in terms of customer
service, without the use of information technology.
15

The RBI set up a number of committees to define and co-ordinate banking technology.
These have included:

In 1984 was formed the Committee on Mechanization in the Banking Industry


(1984)[11] whose chairman was Dr. C Rangarajan, Deputy Governor, Reserve Bank
of India. The major recommendations of this committee were introducing MICR
technology in all the banks in the metropolises in India. [12] This provided for the use
of standardized cheque forms and encoders.

In 1988, the RBI set up the Committee on Computerisation in Banks (1988) [13]
headed by Dr. C Rangarajan. It emphasized that settlement operation must be
computerized in the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur,
Patna and Thiruvananthapuram. It further stated that there should be National
Clearing of inter-city cheques at Kolkata, Mumbai, Delhi, Chennai and MICR
should be made operational. It also focused on computerisation of branches and
increasing connectivity among branches through computers. It also suggested
modalities for implementing on-line banking. The committee submitted its reports in
1989 and computerisation began from 1993 with the settlement between IBA and
bank employees' associations.[14]

In 1994, the Committee on Technology Issues relating to Payment systems,


Cheque Clearing and Securities Settlement in the Banking Industry (1994)[15] was
set up under Chairman W S Saraf. It emphasized Electronic Funds Transfer (EFT)
system, with the BANKNET communications network as its carrier. It also said that
MICR clearing should be set up in all branches of all those banks with more than
100 branches.

In 1995, the Committee for proposing Legislation on Electronic Funds Transfer and
other Electronic Payments (1995)[16] again emphasized EFT system.[14]

Total numbers of ATMs installed in India by various banks as on end June 2012 is 99,218.
[17]

The New Private Sector Banks in India are having the largest numbers of ATMs, which

is followed by off-site ATMs belonging to SBI and its subsidiaries and then by Nationalised
banks and Foreign banks. While on site is highest for the Nationalised banks of India.
16

Branches and ATMs of Scheduled Commercial Banks as on end March 2005[14]


Bank type
Number of branches On-site ATMs Off-site ATMs Total ATMs
Nationalised banks
33,627
3,205
1,567
4,772
State Bank of India
13,661
1,548
3,672
5,220
Old private sector banks
4,511
800
441
1,241
New private sector banks
1,685
1,883
3,729
5,612
Foreign banks
242
218
582
800
TOTAL
53,726
7,654
9,409
17,645

Expansion of Banking Infrastructure


As per Census 2011, 58.7% households are availing banking services in the country.
There are 102,343 branches of Scheduled Commercial Banks (SCBs) in the country, out
of which 37,953 (37%) bank branches are in the rural areas and 27,219 (26%) in semiurban areas, constituting 63% of the total numbers of branches in semi-urban and rural
areas of the country. However, a significant proportion of the households, especially in
rural areas, are still outside the formal fold of the banking system. To extend the reach of
banking to those outside the formal banking system, Government and Reserve Bank of
India (RBI) are taking various initiatives from time to time some of which are enumerated
below:

Opening of Bank Branches: Government had issued detailed strategy and


guidelines on Financial Inclusion in October 2011, advising banks to open
branches in all habitations of 5,000 or more population in under-banked districts
and 10,000 or more population in other districts. Out of 3,925 such identified
villages/habitations, branches have been opened in 3,402 villages/habitations
(including 2,121 Ultra Small Branches) by end of April, 2013.

Each household to have at least one bank account: Banks have been advised to
ensure service area bank in rural areas and banks assigned the responsibility in
specific wards in urban area to ensure that every household has at least one bank
account.

Business Correspondent Model: With the objective of ensuring greater financial


inclusion and increasing the outreach of the banking sector, banks were permitted
by RBI in 2006 to use the services of intermediaries in providing financial and
17

banking services through the use of Business Facilitators (BFs) and Business
Correspondents (BCs). Business correspondents are retail agents engaged by
banks for providing banking services at locations other than a bank branch/ATM.
BCs and the BC Agents (BCAs) represent the bank concerned and enable a bank
to expand its outreach and offer limited range of banking services at low cost,
particularly where setting up a brick and mortar branch is not viable. BCs as agents
of the banks, thus, are an integral part of the business strategy for achieving
greater financial inclusion. Banks had been permitted to engage individuals/entities
as BC like retired bank employees, retired teachers, retired government
employees, ex-servicemen, individual owners of kirana/medical/fair price shops,
individual Public Call Office (PCO) operators, agents of Small Savings Schemes of
Government of India, insurance companies, etc. Further, since September 2010,
RBI had permitted banks to engage "for profit" companies registered under the
Indian Companies Act, 1956, excluding Non-Banking Financial Companies
(NBFCs), as BCs in addition to individuals/entities permitted earlier. According to
the data maintained by RBI, as in December, 2012, there were over 152,000 BCs
deployed by Banks. During 2012-13, over 183.8 million transactions valued at 165
billion (US$2.8 billion) had been undertaken by BCs till December 2012.

Swabhimaan Campaign: Under "Swabhimaan" - the Financial Inclusion Campaign


launched in February 2011, banks had provided banking facilities by March, 2012
to over 74,000 habitations having population in excess of 2000 using various
models and technologies including branchless banking through Business
Correspondents Agents (BCAs). Further, in terms of Finance Minister's Budget
Speech 2012-13, the "Swabhimaan" campaign has been extended to habitations
with population of more than 1,000 in North Eastern and Hilly States and to
habitations which have crossed population of 1,600 as per census 2001. About
40,000 such habitations have been identified to be covered under the extended
"Swabhimaan" campaign.

Setting up of Ultra Small Branches (USBs): Considering the need for close
supervision and mentoring of the Business Correspondent Agents (BCAs) by the
respective banks and to ensure that a range of banking services are available to
18

the residents of such villages, Ultra Small Branches (USBs) are being set up in all
villages covered through BCAs under Financial Inclusion. A USB would comprise
of a small area of 100 sq ft (9.3 m2) - 200 sq ft (19 m2) where the officer designated
by the bank would be available with a laptop on pre-determined days. While the
cash services would be offered by the BCAs, the bank officer would offer other
services, undertake field verification and follow up on the banking transactions.
The periodicity and duration of visits can be progressively enhanced depending
upon business potential in the area. A total of over 50,000 USBs have been set up
in the country by March, 2013.

Banking Facilities in Unbanked Blocks: All the 129 unbanked blocks (91 in North
East States and 38 in other States) identified in the country in July 2009, had been
provided with banking facilities by March 2012, either through Brick Mortar Branch
or Business Correspondents or Mobile van. As a next step it has been advised to
cover all those blocks with BCA and Ultra Small Branch which have so far been
covered by mobile van only.

USSD Based Mobile Banking: National Payments Corporation of India (NPCI)


worked upon a "Common USSD Platform" for all banks and telcos who wish to
offer the facility of Mobile Banking using Unstructured Supplementary Service Data
(USSD) based Mobile Banking. The Department helped NPCI to get a common
USSD Code *99# for all telcos. More than 20 banks have joined the National
Uniform USSD Platform (NUUP) of NPCI and the product has been launched by
NPCI with BSNL and MTNL. Other telcos are likely to join in the near future. USSD
based Mobile Banking offers basic Banking facilities like Money Transfer, Bill
Payments, Balance Enquiries, Merchant Payments etc. on a simple GSM based
Mobile phone, without the need to download application on a phone as required at
present in the IMPS based Mobile Banking.

Steps taken by Reserve Bank of India (RBI) to strengthen the Banking Infrastructure

RBI has permitted domestic Scheduled Commercial Banks (excluding RRBs) to


open branches in tier 2 to tier 6 cities (with population up to 99,999 as per census
19

2001) without the need to take permission from RBI in each case, subject to
reporting.

RBI has also permitted SCBs (excluding RRBs) to open branches in rural, semiurban and urban centres in North Eastern States and Sikkim without having the
need to take permission from RBI in each case, subject to reporting.

Regional Rural Banks (RRBs) are also allowed to open branches in Tier 2 to Tier 6
centres (with population up to 99,999 as per Census 2001) without the need to
take permission from RBI in each case, subject to reporting, provided they fulfill the
following conditions, as per the latest inspection report:

CRAR of at least 9%;

Net NPA less than 5%;

No default in CRR / SLR for the last year;

Net profit in the last financial year;

CBS compliant.

Domestic SCBs have been advised that while preparing their Annual Branch
Expansion Plan (ABEP), they should allocate at least 25% of the total number of
branches proposed to be opened during the year in unbanked Tier 5 and Tier 6
centres i.e. (population up to 9,999) centres which do not have a brick and mortar
structure of any SCB for customer based banking transactions.

RRBs have also been advised to allocate at least 25% of the total number of
branches proposed to be opened during a year in unbanked rural (Tier 5 and Tier
6) Centres).

New private sector banks are required to ensure that at least 25% of their total
branches are in semi-urban and rural centres on an ongoing basis.

20

Banking Overview
The major participants of the Indian financial system are the commercial banks, the
financial institutions (FIs), encompassing term-lending institutions, investment institutions,
specialized financial institutions and the state-level development banks, Non-Bank
Financial Companies (NBFCs) and other market intermediaries such as the stock brokers
and money-lenders. The commercial banks and certain variants of NBFCs are among the
oldest of the market participants. The FIs, on the other hand, are relatively new entities in
the financial market place.

Historical-Perspective
Bank of Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on
modern lines started with the establishment of three presidency banks under Presidency
Bank's act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras. In 1921, all
presidency banks were amalgamated to form the Imperial Bank of India. Imperial bank
carried out limited central banking functions also prior to establishment of RBI. It engaged
in all types of commercial banking business except dealing in foreign exchange.
Reserve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI) was
constituted as an apex bank without major government ownership. Banking Regulations
Act was passed in 1949. This regulation brought Reserve Bank of India under
government control. Under the act, RBI got wide ranging powers for supervision & control
of banks. The Act also vested licensing powers & the authority to conduct inspections in
RBI.
In 1955, RBI acquired control of the Imperial Bank of India, which was renamed as
State Bank of India. In 1959, SBI took over control of eight private banks floated in
the

erstwhile

princely

states,

making

them

as

its

100%

subsidiaries.

RBI was empowered in 1960, to force compulsory merger of weak banks with the
strong ones. The total number of banks was thus reduced from 566 in 1951 to 85 in
1969. In July 1969, government nationalized 14 banks having deposits of Rs.50
crores& above. In 1980, government acquired 6 more banks with deposits of more
21

than Rs.200 crores. Nationalization of banks was to make them play the role of
catalytic agents for economic growth. The Narsimham Committee report suggested
wide ranging reforms for the banking sector in 1992 to introduce internationally
accepted banking practices.
The amendment of Banking Regulation Act in 1993 saw the entry of new private
sector banks.
Banking Segment in India functions under the umbrella of Reserve Bank of India the regulatory, central bank. This segment broadly consists of:
1. Commercial Banks
2. Co-operative Banks

Commercial Bank
The commercial banking structure in India consists of:

Scheduled Commercial Banks

Unscheduled Banks

Scheduled commercial Banks constitute those banks which have been included in
the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes
only those banks in this schedule which satisfy the criteria laid down vide section 42
(60 of the Act. Some co-operative banks are scheduled commercial banks albeit not
all co-operative banks are. Being a part of the second schedule confers some
benefits to the bank in terms of access to accommodation by RBI during the times
of liquidity constraints. At the same time, however, this status also subjects the
bank certain conditions and obligation towards the reserve regulations of RBI. This
sub sector can broadly be classified into:
1. Public sector
2. Private sector
22

3. Foreign banks.
Co-operative bank
There are two main categories of the co-operative banks.
(a) Short term lending oriented co-operative Banks - within this category there are
three sub categories of banks viz state co-operative banks, District co-operative banks
and Primary ricultural co-operative societies.
(b) Long term lending oriented co-operative Banks - within the second category there
are land development banks at three levels state level, district level and village level.
The co-operative banking structure in India is divided into following main 5 categories :
1. Primary Urban Co-op Banks:
2. Primary Agricultural Credit Societies:
3. District Central Co-op Banks:
4, State Co-operative Banks:
5. Land Development Banks:

Banking Basics
Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of
lending or investment of deposits of money from the public, repayable on demand or
otherwise and withdraw able by cheques, draft, order or otherwise."
Most of the activities a Bank performs are derived from the above definition. In addition,
Banks are allowed to perform certain activities which are ancillary to this business of
accepting deposits and lending. A bank's relationship with the public, therefore, revolves
around accepting deposits and lending money. Another activity which is assuming
increasing importance is transfer of money - both domestic and foreign - from one place
to another. This
Banking in India has its origin as early as the Vedic period. It is believed that the transition
from money lending to banking must have occurred even before Manu. The great Hindu
Jurist, who devoted a section of his work to deposits and advances and lay down rules
23

relating to rate of interest. During the Mogul period, the indigenous banker played a very
important role in lending money and financing foreign trade and commerce. During the
days of the East India Company it was the turn of the agency houses to carry on the
banking business.
The General Bank of India was the first joint Stock Bank to be established in the year
1786. The others, which followed, were the Bank of Hindustan and Bengal Bank. The
bank of Hindustan is reported to have continued till 1906 while the other two failed in the
meantime. In Bank of Bengal in 1809, the Bank of Bombay in 1840 and the bank of
madras in 1843. These three banks also known as presidency Bank were independent
units and functioned well. These three banks were amalgam
ated on 27th January 1921. With the passing of the State Bank of India Act in 1955 the
Reserve Bank of India Act 1934. In the wake of the Swadeshi Movement, a number of
bank with Indian management were establish in the country namely, Punjab National
Bank Ltd., Bank of India Ltd., the Central Bank of India Ltd., Indian Bank Ltd., the Bank of
Baroda Ltd., and the Central Bank of India Ltd. On July 19, 1969 fourteen major banks of
the Country were nationalized & in 15 th April 1980 six more commercial private sector
banks were also taken over by the Government.
Today the commercial banking system in India may be distinguished into

24

PUBLIC SECTOR BANKS:


State Bank of India & its associate bank called the State Bank Group, 20 nationalized
banks, Regional Rural Banks mainly sponsored by public sector banks Old generation
private bank, New generation private bank, foreign banks in India, Scheduled cooperative bank, non-scheduled banks

CO-OPERATIVE SECTOR BANKS:


The co-operative sector has been developed in the country to the supplement the Village
moneylender. The co-operative banking sector in India is divided into four components
State

Co-operative

Banks,

Central

Co-operative

Banks,

Primary

Agriculture Credit Societies, Land Development Banks, Urban Co-operative banks,


Primary Agriculture Development Banks, Primary Land Development Banks, and State
Land Development Banks.

The Global Indian Financial Services Brand

Our customers will enjoy the benefits of dealing with a global Indian brand that best
understands their needs and delivers customized pragmatic solutions across
multiple platforms.

We will be a world class Indian financial services group. Our technology and best
practices will be bench-marked along international lines while our understanding of
customers will be uniquely Indian.

We will be more than a repository of our customers' savings. We, the group, will be
single window to every financial service in a customer's universe.

DEVELOPMENT BANKS:
Industrial Finance Corporation of India (IFCI), Industrial Development Bank of India
(IDBI), Industrial Credit and Investment Corporation of India (ICICI), Industrial Investment
Bank of India (IIBI), Small Industrial Development Bank of India(SIDBI), SCICI Ltd.,
National Bank for Agriculture and Rural Development(NABARD0, Export Import Bank of
India.
25

NATIONAL HOUSING BANK:


The Indian banking can be broadly categorized into Nationalized, Private Banks &
Specialized Banking Institution. The RBI Act as a centralized body monitoring and
discrepancies and short coming in the system. Since the Nationalization of Banks in
1969, the public sector banks have accrued a place of prominence and have since then
seen tremendous progress. Conservative banking practices allowed India Banks to be
insulated partially form the Asia currency crises, India banks are now quoting all higher
valuation when compared to Bank to other Asian countries that have major problems
linked to huge NPAs and payment defaults. Co-operative banks are nimble footed in
approach and armed with efficient branch network focus primarily on the high revenue
niche retail segments. The India banking was finally worked up to the competitive
dynamic of the new India market and is addressing the relevant issues to take on the
multifarious challenges of globalization.
Private Banks has been fast on the uptake and is reorienting their strategies using the
interest as a medium. The Interest has emerged as the new challenging frontier of
marketing. The large does of liberalization have largely brought this transformation and
economic reforms that allowed banks to explore new business opportunities rather
generating revenues from conventional streams i.e. borrowing and lending.
The banking in India is highly fragmented with banking unit contributing to almost 55 of
deposits and 60% of advances. Indian nationalized banks continue to be the major lender
in the economy duet to their sheer size and penetrative networks which assures them
high deposit mobilization. The India banking can be broadly categorized into nationalized,
private banks and specialized banking institutions. The RBI acts as a centralized body
monitoring any discrepancies and shortcoming in the system. It is foremost monitoring
body in the Indian financial sector. The nationalized banks continue that out of
commercial banks operating in India, banks are in the public sector and 5 are in the
private sector. The private sector bank grids also include foreign banks that have started
their operation here.
KOTAK MAHINDRA GROUP is one of Indias leading financial institutions, offering
complete financial solutions that encompass every sphere of life. From commercial
26

banking, to stock broking, to mutual funds, to life insurance, to investment banking, the
caters to the financial needs of individuals and corporate.
The group has a net worth of around Rs.2900 crores and employs over 8800employees
in its various businesses. With a presence in 74 cities in India and offices in New York,
London, Dubai and Mauritius, it provides services to a customer base of over 5,00,000.
Kotakmahindra has international partnerships with Goldman Sachs (one of the worlds
largest investment banks and brokerage firms), Ford credit (one of the worlds largest
dedicated automobile financiers) and old Mutual (a large insurance, banking and asset
management conglomerate).

OUR CORPORATE IDENTITY


An idea in the highest sense of a word cannot be conveyed, but, a symbol can be:

The symbol of the Infinite Ka reflects our global Indian personality. The Ka is uniquely
while its curve forms the infinity sign, which is universal. One of the basic tenets of
economics is that mans needs are unlimited. The Infinite Ka symbolizes that we have an
infinite number of ways to meet those needs.
27

VISION STATEMENT
The global Indian financial services brand: our customers will enjoy
the benefits of dealing with a global Indian brand that best understand their
needs and delivers customized pragmatic solutions across multiple platforms.
We will be a world-class Indian financial services group. Our technology and
best practices will be benchmarked along international lines while our
understanding of customers will be uniquely Indian. We will be more than a
repository of our customers savings. We, the group, will be a single window to
every financial service in costumers universe.

The most preferred employer in financial services: A culture of


empowerment and a spirit of enterprise attracts bright mind with an
entrepreneurial steak to join us and stay with us. Working with a home grown,
professionally-managed company, which has partnerships with international
leader, gives our people a perspective that is universal as well as unique.
The most trusted financial services company; - We will create an
ethos of trust across all our constituents. Adhering to high standards of
compliance and cooperated governance will be an integral part of building trust.
Value creation: Value creation rather than size alone will be our business
driver

28

Kotak Mahindra Capital Ltd

Kotak Old Mutual Life Insurance


Kotak Mahindra Securities Ltd

Kotak Mahindra Amc Ltd

Kotak Mahindra Bank Ltd

KEY GROUP COMPANIES AND THEIR BUSINESS

Kotak Mahindra Bank Ltd. Is the Kotak Mahindra Groups flagship company. Kotak
Mahindra Finance Ltd that was established in 1985, was converted into a bank Kotak
Mahindra Bank Ltd in March 2003 thus becoming the first Indian finance company to be
converted into a Bank. Its banking operations offers a central platform for customer
relationships across the groups various businesses. The bank has presence in the
Commercial Vehicles, Retail Finance, Corporate Banking and Treasury and has recently
entered the Housing Finance segment Kotak Mahindra Capital CompanyKotak
Mahindra Capital Company Limited (KMCC), Indias premier Investment Bank and a
29

Primary Dealer (PD) approved by the RBI, is a strategic joint venture between Kotak
Mahindra Bank Limited and the Goldman Sachs Group, LLP. kMCCs core business
areas include Equity Issuances, mergers & Acquisitions, Structured Finance and Advisory
Services, Fixed income Securities and Principal Business.
Activity is generally known as "remittance business" in banking parlance. The so called
forex (foreign exchange) business is largely a part of remittance albeit it involves buying
and selling of foreign currencies.
The law governing Banking Activities in India is called "Negotiable Instruments Act 1881".
The banking activities can be classified asAccepting Deposits from public/others
(Deposits)
Lending money to public (Loans)Transferring money from one place to another
(Remittances)Acting as trusteesActing as intermediariesKeeping valuables in safe
custodyCollectionBusinessGovernment business.
Bank Account
A Bank Account is the record of financial relationship a customer has with the Bank. It
contains details of all the moneys deposited with the Bank and withdrawn from it. There
are many Bank accounts, but basically there are two types:
DEPOSITS
LOANS
Banks are among the main participants of the financial system in India. Banking offers
several facilities & Opportunities. This section of the provides comprehensive and
updated information,guidance and assistance on all areas of banking in India.Bank of
Hindustan, set up in 1870, was the earliest Indian Bank . Banking in India on modern
lines started with the establishment of three presidency banks under Presidency Bank's
act 1876 i.e. Bank of Calcutta, Bank of Bombay and Bank of Madras. In 1921, all
presidency banks were amalgamated to form theImperial Bank of India.

30

The commercial banking structure in India consists of: Scheduled Commercial Banks &
Unscheduled Banks. Banking Regulation Act of India, 1949 defines Banking as
"accepting, for the purpose of lending or investment of deposits of money from the public,
repayable on demand or otherwise and withdrawable by cheques, draft, order or
otherwise."
The Software Packages for Banking Applications in India had their beginnings in the
middle of 80s, when the Banks. spurred on by RBI and the Rangarajan Committee
Report, started computerising the branches in a limited manner.
The arrival of foreign and private banks with their superior state-of-the-art technologybased services pushed Indian Banks also to follow suit by going in for the latest
technologies so as to meet the threat of competition and retain customer base.

Functioning of a Bank
Functioning of a Bank is among the more complicated of corporateoperations.
Since Banking involves dealing directly with money, governments in most countries
regulate this sector rather stringently. In India, the regulation traditionally has been
very strict and in the opinion of certain quarters, responsible for the present
condition of banks, where NPAs are of a very high order. The process of financial
reforms, which started in 1991 has cleared the cobwebs somewhat but a lot
remains to be done. The multiplicity of policy and regulations that a Bank has to
work with, makes its operations even more complicated, sometimes bordering on
illogical. This section, which is also intended for banking professional, attempts to
give an overview of the functions in as simple manner as possible.
Banking Regulation Act of India, 1949 defines Banking as "accepting, for the
purpose of lending or investment of deposits of money from the public, repayable
on demand or otherwise and withdrawable by cheques, draft, order or otherwise."
Deriving from this definition and viewed solely from the point of view of the
customers, Banks essentially perform the following functions :

31

Accepting Deposits from public/others (Deposits)


Lending money to public (Loans)
Transferring money from one place to another (Remittances)
Acting as trustees
Keeping valuables in safe custody
Government business
But do these functions constitute banking? The answer must be a no. There are so
many intricacies involved in the activities that a bank performs today, that the above
list must sound very simple to a seasoned banker. Please click on the activity to
see what a Bank has to do to give the above services to its customers. These
activities can also be described as back office banking.
Banks are organized in a linear structure to performed these activities at the base
of which lies a Branch. The corporate office of a bank is normally called Head
Office.

Industry profile
For more than three decades the banking sector in India has exceptional achievements.
The most striking is its extensive reach. It is not only metropolitan and cosmopolitan
cities; it has reached every remote corner of the country. This has led to tremendous
growth in the banking sector.
Earlier one to had wait for hours to get simple things done like withdrawing cash, making
a draft etc. But now such activities are just a click away from you. The Reserve Bank of
Indias (RBI) role in achieving such milestones has been remarkable. The are three main
phases in the Indian Banking sector-

32

1. The early stage that is from the year 1786 to 1969, the banks were very
conservative. The first bank to be set up was the General Bank of India. Then the
Hindustan bank and the Bengal Bank. The East India Company started three
banks- Bank of Bengal, Bank of Bombay and Bank of Madras. This later combined
to form the Imperial Bank.
The Allahabad bank was the first bank which started and controlled by Indians. A lot of
banks emerged during the 90s. Most of them were private.
The period between 1913 and 1969 saw slow growth and many failures in the banking
industry. To streamline the functioning and activities of commercial banks, the
Government of India came up with The Banking Companies Act, 1949 which was later
changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of
1965). Reserve Bank of India was vested with extensive powers for the supervision of
banking in India as the Central Banking Authority.
2. After independence the Government took to many steps to improve banking. It brought
awareness among people and inculcated a sense of savings in the minds of the Indians.
It mainly concentrated on the semi urban and rural areas of the country. The second
phase of nationalization of Indian banks took place in the year 1980. Seven more banks
were nationalized with deposits over 200 crores. Till this year, approximately 80% of the
banking segment in India was under Government ownership.
After the nationalization of banks in India, the branches of the public sector banks rose to
approximately 800% in deposits and advances took a huge jump by 11,000%. Banking in
the sunshine of Government ownership gave the public implicit faith and immense
confidence about the sustainability of these institutions.
3. In this phase the banks introduced many products. The foreign banks entered the
country and opened new ways for the sector. They introduced the ATM machines. Also a
committee led by M. Narasimhan helped in the liberalization of banking practices. Efforts
are being put to give a satisfactory service to customers. Phone banking and net banking
33

is introduced. The entire system became more convenient and swift. Time is given more
importance than money.
The Indian banking industry is passing through a phase of customers market. A
competition has been established within the banks operating in India. With stiff
competition and advancement of technology, the services provided by banks have
become more easy and convenient.

Banks in India
The banks in India are segregated to many groups. Each group has its unique features
and limitations. Each has its own target market and is dedicated to it. Few of them only
work in rural sector while others in both rural as well as urban. Many are catering in cities
only. Some are of Indian origin and some are foreign players. There are mainly 6 groups Public sector Banks
Private sector Banks
Co-operative sector Banks
Regional Rural sector Banks
Foreign Banks
Upcoming Foreign Banks

Public Sector Banks


These banks are owned the government and the RBI is central bank controlling these
banks. Most of the public sector banks are nationalized like SBI, Canara Bank, Vijaya
Bank, Allahabad Bank, Central Bank of India, Andhra Bank, etc.

Private Sector Banks


34

Private banking in India was practiced since the beginning of banking system in India.
The first private bank in India to be set up in Private Sector Banks in India was IndusInd
Bank. It is one of the fastest growing private sector banks in India. IDBI ranks the tenth
largest development bank in the world as Private Banks in India and has promoted world
class institutions in India.
The first Private Bank in India to receive an in principle approval from the Reserve Bank
of India was Housing Development Finance Corporation Limited, to set up a bank in the
private sector banks in India as part of the RBI's liberalization of the Indian Banking
Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office
in Mumbai and commenced operations as Scheduled Commercial Bank in January 1995.

Co-operative Sector Banks


The Co-operative banks in India started functioning almost 100 years ago. The
Cooperative bank is an important constituent of the Indian Financial System, judging by
the role assigned to co operative, the expectations the co operative is supposed to fulfill,
their number, and the number of offices the cooperative bank operate. Though the cooperative movement originated in the West, but the importance of such banks have
assumed in India is rarely paralleled anywhere else in the world. The cooperative banks
in India play an important role even today in rural financing. The businesses of
cooperative bank in the urban areas also have increased phenomenally in recent years
due to the sharp increase in the number of primary co-operative banks.

Regional Rural Sector Banks


Rural banking in India started since the establishment of banking sector in India. Rural
Banks in those days mainly focused upon the agro sector. Regional rural banks in India
penetrated every corner of the country and extended a helping hand in the growth
process of the country.

Foreign Banks

35

Foreign Banks in India always brought an explanation about the prompt services to
customers. After the set up foreign banks in India, the banking sector in India also
become competitive.
New rules announced by the Reserve Bank of India for the foreign banks in India in this
budget have put up great hopes among foreign banks which allow them to grow
unfettered. Now foreign banks in India are permitted to set up local subsidiaries. The
policy conveys that foreign banks in India may not acquire Indian ones (except for weak
banks identified by the RBI, on its terms) and their Indian subsidiaries will not be able to
open branches freely.

Upcoming Foreign Banks


By 2009 few more names is going to be added in the list of foreign banks in India. This is
as an aftermath of the sudden interest shown by Reserve Bank of India paving roadmap
for foreign banks in India greater freedom in India. Among them is the world's best private
bank by Euro Money magazine, Switzerland's UBS.
Think Investment Think Kotak
Banks like Kotak Mahindra, standard chartered, ICICI, HDFC, and Citibank now
bring your Bank Account and Debit card to your fingertips. With Mobile commerce, you
can perform a wide range of query-based transactions from your Mobile Phone, without
even making a call.
Kotak Mahindra is one of India's leading financial institutions, offering complete
financial solutions that encompass every sphere of life. From commercial banking, to
stock broking, to mutual funds, to life insurance, to investment banking, the group caters
to the financial needs of individuals and corporate.
The group has a net worth of over Rs.1, 800 crore and employs over 4,400
employees in its various businesses. With a presence in 82 cities in India and offices in
New York, London, Dubai and Mauritius, it services a customer base of over 5, 00,000.
36

Kotak Mahindra has international partnerships with Goldman Sachs (one of the
world's largest investment banks and brokerage firms) and Old Mutual (a large insurance,
banking and asset management conglomerate).
The Kotak Mahindra Group was born in 1985 as Kotak Capital Management
Finance Limited. This company was promoted by UdayKotak, Sidney A. Pinto and
Kotak& Company. Industrialists Harish Mahindra and Anand Mahindra took a stake in
1986, and that's when the company changed its name to Kotak Mahindra
Finance Limited. Since then it's been a steady and confident journey to growth and
success.

37

INTRODUCTION OF THE ORGANISATION


Established in 1984, The Kotak Mahindra Group has long been one of Indias most
reputed financial organizations. In Feb 2003, Kotak Mahindra Finance Ltd., the groups
flagship company was given the license to carry on banking business by the Reserve
Bank of India (RBI).This approval creates banking history since Kotak Mahindra Finance
Ltd is the first company in India to convert to a bank. The license authorizing the bank to
carry on banking business has been obtained from the RBI in tune with Section 22 of the
Banking Regulation Act 1949.
KMBL was promoted by Mr. Uday S. Kotak, Kotak and Company Ltd and Mr.
Sidney & A. A. Pinto under the name of Kotak Capital Management Finance Ltd on 21st
Nov 1985 and obtained a Certificate of Commencement of Business on 11th Feb 1986.
The bank customers have access to entire VISA network of 4500 ATMS in India and
800000ATMS worldwide accepted in more than 56000 establishments across India and
10 million worldwide. The customer also has access to over 800 ATMs with sharing
arrangements with UTI BANK, of these 125 are in the NCR.
Key group companies and their businesses
Kotak Mahindra Bank
The Kotak Mahindra Group's flagship company, Kotak Mahindra Finance Ltd which
was established in 1985, was converted into a bank- Kotak Mahindra Bank Ltd in March
2003 becoming the first Indian company to convert into a Bank. Its banking operations
offer a central platform for customer relationships across the group's various businesses.
The bank has presence in Commercial Vehicles, Retail Finance, Corporate Banking,
Treasury and Housing Finance.
Kotak Mahindra Capital Company
Kotak Mahindra Capital Company Limited (KMCC) is India's premier Investment
Bank. KMCC's core business areas include Equity Issuances, Mergers & Acquisitions,
Structured Finance and Advisory Services.

38

Kotak Securities
Kotak Securities Ltd. is one of India's largest brokerage and securities distribution
houses. Over the years, Kotak Securities has been one of the leading investment broking
houses catering to the needs of both institutional and non-institutional investor categories
with presence all over the country through franchisees and coordinators. Kotak Securities
Ltd. offers online and offline services based on well-researched expertise and financial
products to non-institutional investors.
Kotak Mahindra Prime
Kotak Mahindra Prime Limited (KMP) (formerly known as Kotak Mahindra Primus
Limited) has been formed with the objective of financing the retail and wholesale trade of
passenger and multi utility vehicles in India. KMP offers customers retail finance for both
new as well as used cars and wholesale finance to dealers in the automobile trade. KMP
continues to be among the leading car finance companies in India.
Kotak Mahindra Asset Management Company
Kotak Mahindra Asset Management Company Kotak Mahindra Asset Management
Company (KMAMC), a subsidiary of Kotak Mahindra Bank, is the asset manager for
Kotak Mahindra Mutual Fund (KMMF). KMMF manages funds in excess of Rs 20,800
crore and offers schemes catering to investors with varying risk-return profiles. It was the
first fund house in the country to launch a dedicated gilt scheme investing only in
government securities.
Kotak Mahindra Old Mutual Life Insurance Limited
Kotak Mahindra Old Mutual Life Insurance Limited is a joint venture between Kotak
Mahindra Bank Ltd. and Old Mutual plc. Kotak Life Insurance helps customers to take
important financial decisions at every stage in life by offering them a wide range of
innovative life insurance products, to make them financially independent.

39

BOARD OF DIRECTORS

Mr. K.M.Gherda Executive Chairman


Mr. UdayKotak Executive Vice Chairman and Managing Director
Mr. Anand Mahindra Co Promoter of Kotak Mahindra Bank and
Vice Chairman and Managing Director of Mahindra and Mahindra
Mr. Cyril Shroff Co Promoter
Mr. Pradeep N Kotak Agri Division of Kotak and Company Limited
Dr. ShankerAcharya
Mr. Shivaji Dam Managing Director Kotak Mahindra Old Mutual Life Insurance Limited
Mr. C.Jayaram Executive Director
Mr. Dipak Gupta Executive Director

PRODUCT DETAIL
Kotak Mahindra Bank is one of the prominent subsidiaries of Kotak Mahindra group. The
activities of the company being parallel to its objective are very wide and cover all the
components of a Bank. The Basic area of Operations is the Banking business, other
products are meant for the regular revenue generation. Being a Banking house, the
company is in regular touch with Banking Accounts, Investment Services,
Convenience Banking and Other Services.

40

They offer complete solutions that address all your financial requirements, whether
you're an individual or a firm. From everyday banking to long term investments their
offering covers it all. This wide range of products is delivered to you with a genuine
understanding of your specific need and warm, personalised service.
Kotak Mahindra Bank, it's not about selling you many different products it's
about working out a holistic, pragmatic solution that addresses your financial needs.
Through their varied products,they commit themselves to becoming banker to the
customer rather than being asset financier to our customers.
Our Story
Milestones that have shaped the Kotak Mahindra Group, since 1986
Since the inception of the erstwhile Kotak Mahindra Finance Limited in 1985, it has been
a steady and confident journey leading to growth and success. The milestones of the
group growth story are listed below yearwise

Kotak Mahindra Bank


Kotak Mahindra Bank

Type
Traded as
Industry
Founded

Public
BSE: 500247
NSE: KOTAKBANK
Financial service
1985 (as Kotak Mahindra Finance

Ltd)
Headquarters Mumbai, Republic of India
Key people
UdayKotak (Founder

&

Executive Vice Chairman)

C. Jayaram (Joint MD)

Dipak Gupta (Joint MD)

41

Shankar

Acharya

(Chairman)
Deposit
Products

Revenue
Net income

Investment

accounts,

Loans,

services,

Business

banking solutions, Treasury and


Fixed income products etc.
10963 crore (US$1.8 billion})
(2011)[1]
1569 crore (US$260 million})

(2011)
Website
www.kotak.com
Kotak Mahindra Bank is an Indian bank and financial service firm established in 1985. It
was previously known as Kotak Mahindra Finance Limited, a non-banking financial
company.
In February 2003, Kotak Mahindra Finance Ltd, the group's flagship company was given
the licence to carry on banking business by the Reserve Bank of India (RBI). Kotak
Mahindra Finance Ltd. is the first company in the Indian banking history to convert to a
bank. As of 2011 to October 2013, it has more than 500 branches, over 1,000 ATMs and a
consolidated balance sheet of approx. US$ 2.9 billion.
The Bank has its registered office at NarimanBhavan, NarimanPoint,Mumbai.
History
The company was founded in 1985 by UdayKotak. In 2003, the company converted to a
commercial bank when it received a license from the Reserve Bank of India, becoming
the first Indian finance company to do so.
In 2005, it made a significant investment when it bought stressed assets from a number of
banks, at full loan value of 1,000 crores.[2]
In January 2011, the bank reported a 32% rise in net profit to 188 crores for the quarter
ended December 2010 against 142 crores the corresponding quarter last year.[3]Kotak
42

Mahindra bank also reached the top 100 most trusted brands of India in The Brand Trust
Report published by Trust Research Advisory in 2011.
Key milestones in the company history included;
Year Milestone
1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
The Investment Banking Division is started. Takes over FICOM, one of India's
1991
largest financial retail marketing networks
1992 Enters the Funds Syndication sector
Brokerage and Distribution businesses incorporated into a separate company 1995 Kotak Securities. Investment Banking division incorporated into a separate
company - Kotak Mahindra Capital Company
The Auto Finance Business is hived off into a separate company -Kotak Mahindra
Prime Limited (formerly known as Kotak Mahindra Primus Limited). Kotak Mahindra
1996 takes a significant stake in Ford Credit Kotak Mahindra Limited, for financing Ford
vehicles. The launch of Matrix Information Services Limited marks the Group's entry

1998

into information distribution.


Enters the mutual fund market with the launch of Kotak Mahindra Asset

Management Company.
2000 Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
Kotak Securities launches its on-line broking site (now www.kotaksecurities.com).
2000 Commencement of private equity activity through setting up of Kotak Mahindra
Venture Capital Fund.
2001 Matrix sold to Friday Corporation
2001 Launches Insurance Services
Kotak Mahindra Finance Ltd. converts to a commercial bank - the first Indian
2003
company to do so.
2004 Launches India Growth Fund, a private equity fund.
Kotak Group realigns joint venture in Ford Credit; Buys Kotak Mahindra Prime
2005
(formerly known as Kotak Mahindra Primus Limited) and sells Ford credit Mahindra.
2005 Launches a real estate fund
Bought the 25% stake held by Goldman Sachs in Kotak Mahindra Capital Company
2006
and Securities
2008 Launched a Pension Fund under the New Pension System
2009 Kotak Mahindra Bank Ltd. Opened a representative office in Dubai
43

Entered Ahmedabad Commodity Exchange as anchor investor


2010
2011

Ahmedabad Derivatives and Commodities Exchange, a Kotak anchored enterprise,


became operational as a national commodity exchange.
Kotak Mahindra Bank Ltd entered into a Business Cooperation arrangement with
CIMB GroupSdnBhd, Malaysia.

2012 - 2007
201

Ahmedabad Derivatives and Commodities Exchange, a Kotak

2
2010

2009
200

anchored enterprise, became operational as a national commodity exchange.

Kotak Mahindra Bank Ltd. opened a representative office in Dubai

Entered Ahmedabad Commodity Exchange as anchor investor.

Launched a Pension Fund under the New Pension System.


Bought the 25% stake held by Goldman Sachs in Kotak Mahindra

8
200

Capital Company and Kotak Securities.


Kotak Group realigned joint venture in Ford Credit; their stake in Kotak

Mahindra Prime was bought out (formerly known as Kotak Mahindra Primus
Ltd) and Kotak groups stake in Ford credit Kotak Mahindra was sold.
Launched a real estate fund.

2004 - 2000
2004
200
3

Launched India Growth Fund, a private equity fund.


Kotak Mahindra Finance Ltd. converted into a commercial bank - the
first Indian company to do so.
44

2001

200

Matrix sold to Friday Corporation.

Launched Insurance Services.

Kotak Securities Ltd. was incorporated


Kotak Mahindra tied up with Old Mutual plc. for the Life Insurance

business.
o

Kotak Securities launched its on-line broking site.

Commencement of private equity activity through setting up of Kotak


Mahindra Venture Capital Fund.

Banking Accounts
There are three types of banking account:
Savings Account
Current Account
Term Deposit

SAVINGS ACCOUNT
Choose from our range of Savings Accounts
KOTAK MAHINDRA has got a variety of options of savings accounts to choose from for
its customers according to their convenience and requirements .These savings accounts
offer attractive

returns along with personalized banking services at three convenient

average quarterly balances(AQB)levels of Rs. 10000 (KOTAK EDGE SAVINGS


ACCOUNT),Rs. 20000 (KOTAK PRO SAVINGS ACCOUNT) and at Rs75000(KOTAK
ACE SAVINGS ACCOUNT).The average quarterly balance levels as well the
corresponding services and benefits try to ensure the various customer needs and
requirements.
45

Thus the three account opening options in savings account are as mentioned above:
EDGE SAVINGS ACCOUNT: Kotak Mahindra Banks Edge Savings Account
is a complete financial package customized to suit individual banking needs. Its
constant Endeavour is to enable regular financial transactions through

online

platform so that most of payments can be made directly through your account or
card.
Features & Benefits
Wide ATM access through the Kotak Mahindra Bank Debit Card
One can walk into any KOTAK or HDFC Bank ATMs to withdraw cash or enquire balance
at no extra charge!
Multiple Access Channels Access
An account through phone, mobile phone or internet to get information about account
balance or track transactions. One can even transfer funds through Phone Banking or
Net Banking.

Financial payments facilitated through the savings account


Use the free Payment Gateway to make online payments for utility bills, credit cards,
online trading of shares or even online shopping.

Quick and easy funds transfer


Quick funds transfer to a third party account with another Bank is available across 15
locations through Net Banking. Also get a multi-city cheque book so that money from
account is received by the beneficiary in the fastest possible time.

46

Free investment account


One can open an investment account, and use the Net Banking facility to
purchase/redeem mutual funds online while directly debiting / crediting your Bank
Account. Besides this you get a consolidated view of all your mutual fund investments
across schemes with updated returns status, latest NAV information and research reports.
Attractive returns
Earn better returns in your savings account, with our 2-Way Sweep facility that
automatically sweeps out idle funds, above a threshold, from your account into Term
Deposits. These Term Deposits sweep back into your account to meet fund requirements
when your withdrawals exceed the balance available in your account, thereby providing
you maximum liquidity.

PRO SAVINGS ACCOUNT:


Kotak Mahindra Bank's Pro Savings Account is an account packed with powerful
features to provide a superior banking experience at a very comfortable balance
requirement. They provide a relationship manager who will specifically take care of
banking and investment needs.
Features & Benefits
Free ATM access all domestic VISA ATM network
Walk into any VISA ATM in India to check balance or withdraw cash absolutely free. no
longer have to worry about locating your Bank or Partner Bank ATM Use the first VISA
ATM that you spot, for cash withdrawal or balance enquiry transactions.
Multiple access channels
Access your account through phone, mobile phone or internet to get information on your
account balance or track your transactions. You can even transfer funds through Phone
Banking or Net Banking.
Free investment account
47

One can open an investment account, and use the Net Banking facility to
purchase/redeem mutual funds online while directly debiting / crediting bank account.
Besides this get a consolidated view of all the mutual fund investments across schemes
with updated returns status, latest NAV information and research reports.
Financial payments facilitated through the savings account
Use our free Payment Gateway to make online payments for utility bills, credit cards,
online trading of shares or even online shopping.
Quick and easy funds transfer
Quick funds transfer to a third party account with another Bank is available across 15
locations through Net Banking. Also get a multi-city cheque book so that money from
account is received by the beneficiary in the fastest possible time
Attractive returns
Earn better returns in your savings account, with our 2-Way Sweep facility that
automatically sweeps out idle funds, above a threshold, from your account into Term
Deposits. These Term Deposits sweep back into your account to meet fund requirements
when your withdrawals exceed the balance available in your account, thereby providing
you maximum liquidity.
Dedicated relationship manager
You get a one point contact for all your banking related queries and transactions. Your
relationship manager will also help you with financial planning and sound investment
decisions.
Free banking transactions
You can issue demand drafts or send cheques for collection on branch locations without
any charge to your account.

ACE SAVINGS ACOUNT:


48

Kotak Mahindra Bank's Ace Savings Account has been designed as a gateway to a world
of financial benefits and privileged banking transactions. The account carries benefits
ranging from personal investment advisory services to concierge services to free banking
transactions. One will find that this package of services and privileges is unmatched by
any other savings account in the market.
Features & Benefits
Free access at all domestic and international VISA ATMs
No longer have to worry about locating your Bank or Partner Bank ATM - Use the first
VISA ATM that you spot, for free cash withdrawal or balance enquiry transactions. So
walk into any VISA ATM in India or abroad to withdraw cash or for balance enquiry.
Multiple access channels
Access the account anytime through land line, mobile phone or internet to get information
on account balance or track transactions. One can even transfer funds through Phone
Banking or Net Banking.
Financial payments facilitated through the savings account
Use the free Kotak Payment Gateway to make online payments for utility bills, credit
cards, online trading of shares or even online shopping. All this at the click of a mouse!
Quick and easy funds transfer Transfer funds easily and with speed, to a beneficiary
account at another bank. One can avail of this facility by walking into any of branches or
by simple logging on to Net Banking. Also get a free multi-city cheque book so that money
from your account is transferred to the beneficiary's account at any of branch locations, in
the faste.
Free banking transactions
One can issue demand drafts or send cheques for collection at all branches for no extra
charge.

49

Attractive returns
Earn better returns in your savings account, with our 2-Way Sweep facility that
automatically sweeps out idle funds, above a threshold, from your account into Term
Deposits. These Term Deposits sweep back into account to meet fund requirements when
withdrawals exceed the balance available in the account, thereby providing maximum
liquidity.

CURRENT ACCOUNT
Kotak Mahindra Bank offers unparalleled advantages with its three Current
Account offerings. Whether small/ mid size business or an enterprise spread across
multiple locations in the country, would find a Current Account that's just designed for you.
These Current accounts offer attractive returns along with personalized banking services
at three convenient average quarterly balances(AQB)levels of Rs. 25000 (KOTAK EDGE
SAVINGS ACCOUNT),Rs. 50000 (KOTAK PRO SAVINGS ACCOUNT) and at
Rs250000(KOTAK ACE SAVINGS ACCOUNT).The average quarterly balance levels as
well the corresponding services and benefits try to ensure the various customer needs
and requirements. With features ranging from Free DDs, Free Cheque Collection, Free At
-Par Cheque facility to Free
Trading account and free Demat account and moral Thus the three account opening
options in savings account are as mentioned above:

Edge Current Account


In need of a well equipped bank account to keep pace in all the business
endeavors. They offer the Kotak Edge Current Account, armed with Kotak 2-Way Sweep
and the entire gamut of Banking Privileges, providing that extra edge to get ahead. The
feature rich Kotak Edge Current Account is the ideal way to make money work harder.
Features & Benefits
MultiCity Banking

50

Current account/s with Kotak Mahindra Bank will be recognized in every other
branch. One can just walk into a Kotak Mahindra Bank branch in any of our branches
across country to satisfy all the banking needs.
2 - Way Sweep* : Term Deposit linked Current Account
Kotak 2-Way Sweep ensures that money never stops working for you. Daily
balances, above a threshold level, in Current Account are automatically swept out into
Term Deposits (TD). This 'swept out amount' is brought back into account to meet fund
requirements when withdrawals exceed the balance available in the account (or when the
account balance goes below the specified threshold level.) With Kotak 2-Way Sweep you
enjoy the twin advantages of attractive returns & maximum liquidity.
Free Demand Drafts and Pay Orders
Enjoy the benefit of our free Demand Drafts, payable at Kotak Mahindra Bank
Branch location in India.
At-par Cheques
Get free At-par Cheques that are treated as 'local clearing' cheques across all
branch locations. All these at nominal costs.
Cheque Collection
All Outstation cheques, drawn on any of branch locations, are collected 'at nominal
charge' for you. The strong network of correspondent banks enables us to collect
cheques from 1600 locations across India at faster speed and minimal cost
PRO Current Account
You need a well equipped bank account to keep pace with you in the ever
changing business scenario. We offer you the Kotak Pro Current Account, armed with
Kotak 2-Way Sweep, as well as an entire gamut of Banking Privileges and 'user-friendly'
Convenience Banking facilities. The feature rich Kotak Pro Current Account is the ideal
way to make your money work harder.
Key Features
51

Dedicated Relationship Manager

Free Demand Drafts & Pay Orders

Free At Home Services

Better Forex rates and Efficient Trade Services


ACE Current Account
In the need of a well equipped bank account to keep pace with you in the ever

changing business scenario. They offer you the Kotak Ace Current Account, armed with
Business benefits and exclusive Ace Privileges and an entire gamut of banking
conveniences especially designed for you. The feature rich Kotak Ace Account is the ideal
way to make money work harder

Term Deposits

Key Features

Ease and convenience of operation

Liquidity through overdraft or sweep-in facility

No penalty on pre-mature encashment

Nomination facility available


52

Give your portfolio stability of returns and safety and liquidity. Invest in Kotak Bank Term
Deposit. It offer attractive returns on term deposits and investing in them is really simple
and convenient.
Features & Benefits
Ease and convenience of operation
For the first time in India, New to Bank customer can also apply online for term
deposit.
An existing customer,can place a term deposit through Phone Banking or Net Banking.
What's more, one can even renew this deposit by placing an instruction over phone.
Needless to mention, he can do all this and more by walking across into any of branches.
Liquidity through overdraft or sweep-in facility
Deposit will be available to you should you need them in case of an emergency.
One can avail upto 85% overdraft against term by paying 2% above deposit rate. This
facility is available for deposits above Rs.50,000 for a tenure of 181 days or more. One
can also choose to link term deposit to savings / current account, whereby if need be,
term deposit will automatically be encashed to meet withdrawal requirement.
No penalty on pre-mature encashment
In case term deposit is pre-maturely encashed,one will earn interest at the rate
prevailing on the date of deposit for the withdrawn amount.
Nomination facility available
One can avail this facility for each & every account that open with us i.e. nominate
different persons for different term deposit accounts can choose to change the nominee
through a declaration in the appropriate form to revise the nomination during the term of
the deposit.

INVESTMENT SERVICES
53

Making your money grow


At Kotak Mahindra Bank, can recognize that financial needs vary, not just amongst
individuals, but across the different stages of your life. They have years of experience in
helping people put together an investment portfolio that works best for them.

DEMAT

54

Key Features
Efficient depository services that allow you to hold your shares in convenient,
"demat" formats Leverage opportunities in the stock-market when you spot them
It offers streamlined, efficient depository services that allow to hold shares in the
convenient "demat" formats and leverage opportunities in the stock-market when you spot
them Being a brokerage house, the company is in regular touch with the share market
and its relative indexes like NSE &BSE, NCDEX. NSDL, CSDL. Lets understand the
relative terms
SEBI (Stock Exchange board of India)
It check out on NSE and BSE and all type of share trading (Both primary and
secondary market)
NSE &BSE: - Kotak Mahindra Bank allows to costumer to trade in share with NSE and
BSE both (in primary and secondary market both). In BSE costumer can trade in 2452
stocks and in NSE costumer can trade in 933 companies. The index of NSE is Nifty and
for BSE Sensex
NSDL AND CSDL
Kotak Mahindra Bank allow to costumer to invest in mutual fund and bonds. NSDL
(National security depository limited) and CSDL (Central security depository limited check
out on this type of investment
MCX AND NCDEX
55

Kotak Mahindra Bank also allow to costumer to trade in commodity by MCX (Multi
Commodity exchange) and NCDEX (National Commodity daily exchange. In NCDEX 55
commodity are to trade

PRODUCTS OFFERED BY KOTAK MAHINRA BANK


The following are the various products of Kotak Mahindra Bank:

DEMAT & ON LINE TRADING ACCOUNT:


The 3-in-1 account integrates your banking, broking and demat accounts. This
enables you to trade in shares without going through the hassles of tracking settlement
cycles, writing cheques and Transfer Instructions, chasing your broker for cheques or
Transfer Instructions etc.
INITIAL PUBLIC OFFERS(IPOS)
In the above products we have discussed investment in equity through secondary
markets .another way of investing in equity markets is through the primary market
route .whenever a company comes out with an initial public offering you may choose to
apply for the share. Based on number of valid application received, the company would
then allot the share to applicants.
The offline way of investing in an IPO is by filling physical application forms,
cheques. And submitting the forms through your broker. With KOTAK MAHINDRA BANK
all you have to do is filling number of share on the site and submit.
DERIVATIVES
Customers with different types of risk profile can use derivatives.

Hedging the cash market position ideal for low risk profile.

Taking advantage of arbitrage opportunity in equity and derivatives markets


ideal for low risk profile
56

Taking a view on stock/index for as long as 3 month period medium risk


profile

Speculative trading-high risk profile

KOTAK MAHINDRA BANK offers online investment in future and option, with benefit of
automated settlements and online risk monitoring system

Mutual Funds
Key Features

Assistance at every step of the investment process

An experienced research team to analyze and research the Mutual Funds


available in the market

Portfolio assistance
The team analyses and researches the Mutual Funds available in the market,

helping you make more informed decisions. The recommendations take into account all
relevant factors including the investment philosophy of the Asset Management Company,
portfolio quality, risk-adjusted returns and market trends.
The Mutual funds on advisory list range form Debt to Equity funds and are drawn
from top performing schemes of renowned Mutual Fund houses like Franklin Templeton,
Kotak, Reliance, Prudential ICICI etc.Relationship Manager will recommend the funds
that suit the investment objectives.
Instead of buying shares of different companies tracking the price movements
performance of the company, growth prospects of the industries etc. and then taking your
own buy/sell decision, you may consider making investment in equity/debt market through
the mutual fund route. Mutual fund is a SEBI registered entity that pools the money of
many individuals investors to purchase the stocks, bond or other financial instruments
.professional

57

Management and diversification are the two primary benefits of mutual fund investing. For
beginners, or for customer who are unable to spend time on researching stocks
themselves,
mutual fund is an ideal route for a investment in equity. Investing in mutual funds offline
involves, tracking down the agents appointed by the mutual funds AMCs, filling lengthy

Bancassurance
They offer a range of carefully selected insurance policies across the entire
spectrum of life insurance products Relationship managers will analyze your insurance
needs and develop the solution that works best for you.
KOTAK INSURANCE has a wide array of insurance plans that have been designed
with the philosophy that different individuals are bound to have differing insurance needs.
The ideal insurance plan is one that addresses the exact insurance needs of the
individual that will depend on the age and life stage of the individual apart from a host of
other factors.
The various plans offered by KOTAK INSURANCE are as follows:

Kotak Smart Advantage Plan

Kotak Eternal Life Plans

Kotak Head start Child Plans

Kotak Safe Investment Plan II

Kotak Flexi Plan

Kotak Easy Growth Plan

Kotak Capital Multiplier Plan

Kotak Term Plan

Kotak Preferred Term Plan

CONVENIENCE BANKING

58

Anywhere, Anytime Banking


In today's day and age time is money. You work hard and have a busy schedule.
Doing banking should be easy and convenient and not add to worries.
Kotak Mahindra Bank realize this and have specially tailored a wide range of value added
products and services to make money work for you. These, coupled with the highest
standard of customer care will make life simpler and easier.
Multiple Banking Channels
Today the technology driven banks are finding various means to reduce costs and
reach out to as many customers as possible spread over a diverse area. This has led to
using multiple channels of delivery of their products.
ATM (Automatic Teller Machine):
An ATM is basically a machine that can deliver cash to the customers on demand
after authentication. However, nowadays we have ATMs that are used to vend different
FMCG products also. An ATM does the basic function of a banks branch, i.e., delivering
money on demand. Hence setting of newer branches is not required thereby significantly
lowering infrastructure costs.
Cost reduction is however possible only when these machines are used. In India,
the average cash withdrawal per ATM per day has fallen from 100 last years to 70 this
year. Though the number of ATMs has increased since last year, it is not in sync with the
number of cards issued. Also, there are many dormant cardholders who do not use the
59

ATMs and prefer the teller counters. In spite of these odds, Indian banks are increasing
the number of ATMs at a feverish pace. These machines also hold the keys to future
operational efficiency
Account holders of Kotak Mahindra Bank Saving Account having Visa Electron Debit Card
can access other Banks ATM machines unlimited times per month for free, after that the
Account holder has to pay nothing for the transaction. But also holders of ATM cards
cannot access machines belonging to other Banks.
The number of ATM machines installed by Kotak Mahindra Bank is 20 in Delhi and
the All India tally is 156 machines. When this figure is compared to ICICI Bank which has
thrice the number of machines in Delhi or HDFC Bank which has nearly twice the number
of machines in Delhi, this is worrying for Kotak Mahindra Bank.

60

Growth In ATM Machine With Increased Use


NAME OF BANK
NUMBER OF ATM MACHINES
(ALL INDIA BASIS)
KOTAK
MAHINDRA Bank
ICICI Bank
HDFC Bank
IDBI
CITIBANK
HSBC
AMN Amro
UTI
GTB

NUMBER OF ATM
MACHINES

122

26

560
625
350
160
103
40
507
250

112
66
43
22
21
13
20

(DELHI)

The Table below shows the number of ATM machines belonging to various banks in
India:From the above table we can clearly see that HDFC Bank is the Bank which has
highest number of ATM machines on All India basis, this is followed by ICICI Bank, then
UTI.
When we look at the concentration of machines in the Delhi Region we see that out of
ICICI Banks 560 Machines 112 are located in Delhi representing 20%.
The corresponding figure for Kotak Mahindra Bank is 14.2%. HDFC Bank is 11.8%, IDBI
Bank is 12.3%, and CITIBANK is 13.75%.

Net Banking:
Net banking means carrying out banking transactions via the Internet. Thus the
need for a branch is completely eliminated by technology. Also this helps in serving the
customer better and tailoring products better suited for the customer.
A customer can view his account details, transaction history, order drafts, electronically
make payments, transfer funds, check his account position and electronically
communicate with the bank through the Internet for which he may have wanted to visit the
bank branch.
61

Net banking helps a bank spread its reach to the entire world at a fraction of the cost
Phone Banking:

This means carrying out of banking transaction through the telephone. A customer
can call up the banks help line or phone banking number to conduct transactions like
transfer of funds, making payments, checking
of account balance, ordering cheques, etc. This also eliminates the customer of the need
to visit the banks branch.
PIN Security
Automated identification process when you use our 24 by 7 Phone Banking service
will help save your call time as well as give you more security, as you will be
validated by using a 6 digit Phone Banking Personal Identification Number (PIN)
that should be known to no one but yourself.
Accessing Phone Banking is easy. All you are required to do when you call us,
is to enter you Customer Relationship Number followed by the '#' key, and validate
it by entering your Phone Banking PIN. Once done successfully, you will be able to
speak with our Customer Care Officer who will be glad to assist you in your queries
or transactions.
PIN Change
If you are a first time caller, you will prompted by the system to change your Phone
Banking PIN to one of your choice, after you've been successfully identified by the
system. We request you to change your PIN accordingly to help ensure that your
account information is not available to anyone but you.
Additionally, you have the option of changing your Phone Banking PIN directly, at
your convenience, by dialing "5" on our Main Menu when you call us.
62

PIN Generation / Regeneration


For all our customers who haven't had the opportunity to register themselves for
Phone Banking, or those who've have forgotten the Phone Banking PIN allocated
to them, our Customer Care Officers will gladly enable you for your access
immediately with your consent. All you will be required to do is ask for your access
or we ourselves will offer to do so.
Customer Care Officers
Our Customer Care Officers are available 24 by 7 to assist you in your queries or
transactions that you may wish to conduct on your account. You may reach a
Customer Care Officer anytime during your call by dialing "0".
In addition to the existing services available over Phone Banking such as:
In order to provide you the convenience of carrying out most of your Banking
transactions in just one call, we have added host of new services* and we are excited to
bring them to you. These include:

Enquire on your account details - your balance, account activity, uncleared.

Fund details and cheque status.

Enquire on the latest interest and exchange rates.

Request for fund transfer* between your accounts at Kotak Mahindra Bank.

Open a term deposit or get details of all your term deposits

Initiate standing instructions or place stop cheque payment instructions.

Request a cheque book and account statements.

* Conditions apply You can give us financial instructions through our Phone Banking service
based on your account operating mandate, i.e. if you have a single or unconditional signing
authority on your account, you can transact on your accounts through the phone. Demat
accountholders can avail of the following Services through Phone Banking

Request for a Demat transaction or holding statement

Enquire about your transaction or holding details

Request for a Demat Instruction Slip booklet to be sent to you


63

Investment accountholders can avail of the following Services through Phone


Banking

Enquire on your account and transaction details

Current NAV details of your investments

Request a statement of account

Purchase and redeem investments online

Check the status of your purchase and redemption requests

Purchase / Redemption of Mutual Fund units

Third Party Funds Transfer to other accounts within our Bank**

Registration for Mobile Banking / Net Banking

Mobile Banking:

Key Features:

Anytime, anywhere banking

Experience online banking without a pc or internet


connection

View details across Accounts, Term Deposits and Investments

Pay utility bills

Invest/Redeem in Mutual Funds - anytime, anywhere

Secured platform - encrypted communication


Banks can now help a customer conduct certain transactions through the Mobile

Phone with the help of technologies like WAP, SMS, etc. This helps a bank to combine
the Internet and telephone and leverage it to cut costs and at the same time provide its
customer the convenience. Thus it can be seen that tech savvy banks are tapping the
entire above alternative channels to cut costs improve customer satisfaction.
Mobile Banking Features:
64

Menu driven service no need to remember complex codes

Security through 128 bit encryption.

Check your account balances for Current, Savings & Term Deposit accounts

View your account activity

Transfer funds between your accounts or other accounts in Kotak Bank

Purchase & redeem Mutual Fund units

Report loss/theft of Debit Card and request for replacement

Check status of your Cheque instruments

Request issue of new Cheque book

Security Features
Kotak Mobile banking platform uses secured Https protocol for communication
between the mobile client and the mobile server. Protected by the most stringent security
systems, Kotak Mobile Banking allows you to transact over a completely secure medium.
All your transactions travel via 128-bit SSL encrypted medium, the highest level of
security on the network. The servers are protected with firewalls that make unauthorized
access impossible.

SMS Banking:

Key Features
Access your bank account on your Mobile Phone
Get latest update on your account balance, salary credits, and more!
FREE service
65

Kotak Mahindra Bank's SMS Banking service enables you to access your bank account,
investment account and demat account on your Mobile Phone. Now get latest update on
your account balance, salary credits, large debits, large credits, holding value and much
more, on your mobile anytime.

ATM Network

Key Features

Access your account anytime anywhere

State of the art Touch Screen ATMs

Affiliated to the VISA network

Access any ATM in the country absolutely free.

The ATM service is available to you absolutely FREE


Our strategically located and constantly growing ATM network brings the bank within your
easy reach.
The state of the art touch screen Kotak Mahindra Bank ATMs are part of the
Visa/Plus and Cashnet ATM network. That means you can withdraw cash from our ATM
Network with any International and Domestic Visa/Visa Electron/Plus Credit Cards/Debit
Cards.
Services available

24-hour access to cash

Transfer funds between accounts

View Account Balances and Mini Statement

Pin Change option

66

INTERNET BANKING
INTRODUCTION
The Internet banking is changing the banking industry and is having the major
effects on banking relationships. Internet banking involves use of Internet for delivery of
banking products & services. It falls into four main categories, from Level 1 - minimum
functionality sites that offer only access to deposit account data - to Level 4 sites - highly
sophisticated offerings enabling integrated sales of additional products and access to
other financial services- such as investment and insurance.
DRIVERS OF CHANGE
Advantages previously held by large financial institutions have shrunk
considerably. The Internet has leveled the playing field and afforded open access to
customers in the global marketplace. Internet banking is a cost-effective delivery channel
for financial institutions. Consumers are embracing the many benefits of Internet banking.
Access to one's accounts at anytime and from any location via the World Wide Web is a
convenience unknown a short time ago.
The primary drivers of Internet banking are:
Improve customer access
Facilitate the offering of more services
Increase customer loyalty
Attract new customers
Core Banking Solutions
Core Banking Solutions is new jargon frequently used in banking circles. The
advancement in technology especially internet and information technology has led to new
way of doing business in banking. The technologies have cut down time, working
simultaneously on different issues and increased efficiency. The platform where
communication technology and information technology are merged to suit core needs of
banking is known as Core Banking Solutions. Here computer software is developed to
perform core operations of banking like recording of transactions, passbook
maintenance, interest calculations on loans and deposits, customer records, balance of
payments and withdrawal are done. This software is installed at different branches of
67

bank and then interconnected by means of communication lines like telephones, satellite,
internet etc. It allows the user (customers) to operate accounts from any branch if it has
installed core banking solutions. This new platform has changed the way banks are
working. Now many advanced features like regulatory requirements and other
specialized services like share (stock) trading are being provided.
Real Time Gross Settlement (RTGS)
RTGS is an electronic settlement system of Reserve Bank of India without
involvement of papers. To facilitate an Efficient, Secure, Economical, Reliable and
Expeditious System of Fund transfer and clearing in the Banking sector throughout India.
Real time gross settlement systems (RTGS) are a funds transfer mechanism where
transfer of money takes place from one bank to another on a "real time" and on "gross"
basis. Settlement in "real time" means payment transaction is not subjected to any
waiting period. The transactions are settled as soon as they are processed. "Gross
settlement" means the transaction is settled on one to one basis without bunching with
any other transaction. Once processed, payments are final and irrevocable.
Electronic Clearing Service (ECS)
Electronic Clearing Service is another technology enhancement happened in the
banking industry. The customer willing to use this facility are required to fill in the
mandate form from the corporate/any utility service institution for ECS mode of credit and
debit. The customer needs to prepare the payment date and submit it to the sponsor
Bank and after that every thing happened electronically. so customer can there by make
payments as well as receive all incomes electronically.
Information Only System: General purpose information like interest rates,
branch location, bank products and their features, loan and deposit calculations
are provided in the banks website. There exist facilities for downloading various
types of application forms. The communication is normally done through e-mail.
There is no interaction between the customer and bank's application system. No
identification of the customer is done. In this system, there is no possibility of any
unauthorized person getting into production systems of the bank through internet.
68

Electronic Information Transfer System:

The system provides customer-

specific information in the form of account balances, transaction details, and


statement of accounts. The information is still largely of the 'read only' format.
Identification and authentication of the customer is through password. The
information is fetched from the bank's application system either in batch mode or
off-line. The application systems cannot directly access through the internet.
Fully Electronic Transactional System:

This system allows bi-directional

capabilities. Transactions can be submitted by the customer for online update. This
system requires high degree of security and control. In this environment, web
server and application systems are linked over secure infrastructure. It comprises
technology covering computerization, networking and security, inter-bank payment
gateway and legal infrastructure.
Internet Banking is the most technological advanced means to do Banking. Through this
medium the Account holder can do various types of transactions without having to leave
his Office/Residence.
The Account holder has the convenience to do transaction no matter where he is in
the world at any time of the day. Internet is the most cost effective medium of Banking
from the point of view of the Banks; it costs a fraction to the Bank as compared to other
mediums like Branch Banking or ATM.
But this medium is not as favored a medium as it in the west , the reasons for this
is that firstly , this is a relatively new concept in India , secondly , general perception that
this is not safe , thirdly , computers and internet are not widely spread all over the
country.
MAIN CONCERNS IN INTERNET BANKING

69

In a survey conducted by the Online Banking Association, member institutions


rated security as the most important issue of online banking. There is a dual requirement
to protect customers' privacy and protect against fraud.
1. A multi-layered security architecture comprising firewalls, filtering routers, encryption
and digital certification ensures that account information is protected from unauthorized
access:
Firewalls and filtering routers ensure that only the legitimate Internet users are allowed to
access the system.
2 Encryption techniques used by the bank (including the sophisticated public key
encryption) would ensure that privacy of data flowing between the browser and the Infinity
system is protected.
3 Digital certification procedures provide the assurance that the data you receive is from
the Infinity system.

STRATEGIC ALLIANCES ENTERED BY KOTAK MAHINDRA BANK


NATIONAL ATM ALLIANCES
The Institute for Development and Research in Banking Technology (IDRBT), a
group established by the Reserve Bank of India (RBI) in 1996, has planned to set up a
national switch to hook up all of the country's 10,000-odd ATMs.
The idea of establishing ATM interconnectivity through a national switch has been
approved by the information chiefs of various Banks.
The expected cost of transactions routed through the switch is to be under 10 rupees (21
cents U.S.) each, due to the high volumes of transactions -- almost 100,000 per day.
CASH NET
It is an Alliance between Citibank, Industrial Development Bank of India, Kotak
Mahindra Bank and UTI Bank. This is the country's first independent shared ATM
network.
70

IDBI Bank received permission from the Reserve Bank (RBI) to serve as the network's
settlement bank.
Cash net will give access to more than 1,300 ATMs for more than 6 million debit
cardholders of the member banks. The Alliance would constitute about a third of the total
card base and 15 percent of the ATM base in the country.
Kotak Mahindra Bank and REDIFF.com
REDIFF.com India and Kotak Mahindra Bank have entered into an alliance to
provide online and offline banking and related services to the Indian consumer.

The alliance will enable information on the entire range of the banks consumer banking
products to be made available to the 6.4 million online customers of Rediff.com.
The services offered include detailed information on various deposits, loans and
mortgages, credit cards, mutual funds and insurance products of the bank. Users will be
able to directly interact with the bank and request for products online

OTHER SERVICES
BANKING HOURS
Kotak Mahindra Bank Account holders

have been able to infer that Branch

Banking is the second most Frequent Point of Interaction with the Bank. The Average
Banking Hours is a very important aspect associated with any Bank. In todays fast paced
life where people who hold Accounts with the Bank are busy working it is important that
they can find a way to visit the Bank without having to miss out on work.
The Average Banking Hours of Kotak Mahindra Bank is from 9am to 7pm, the
Bank is open to the public for ten hours. These timings are convenient for especially
those Account holders who are working, these people can visit the Bank after their Office
71

finishes.Apart from the Average Banking Hours Kotak Mahindra Bank offers to its
Account holders 24 Hour Branch, 365 Days Branch and the facility of Sunday Banking.
Kotak Mahindra Bank is the only Bank which offers a 24 Hour Branch in India, this
is a big boon for people who cannot take the time out to visit the Bank during the normal
working hours and is also very handy during emergencies.
The 365 Day Branch of Kotak Mahindra Bank is also unique and the only other Bank
offering this service is ABN Amro , this Branch is open regardless of the fact that it is a
Sunday or a public holiday.
Sunday Banking is very useful for people who are busy throughout the week and the only
day when they find the time is Sunday. Other Banks offering this service apart from Kotak
Mahindra Bank are ABN Amro and CITIBANK.
Best Compliments Card the perfect gift
Introducing Best Compliments Card - the prepaid card from Kotak Mahindra Bank. It
lets your loved ones choose their own gift or shop or enjoy at any place that accepts
Visa cards, be it a shopping mall, a restaurant or a multiplex. So go ahead and give
someone the perfect gift!
No Kotak Mahindra Bank account required
Not restricted to a single brand or outlet - accepted at over 3 lakhs merchant
establishments in India that accept Visa cards
Can be used at your convenience - no need to spend the entire value in a single
purchase
Attractively packaged and ready-to-gift
Available at all Kotak Mahindra Bank branches
Valid for two years from date of issue of card

REASEARCH METHODOLOGY
Banking Activities, Loans, Accounts & Deposits
3.1 Objective of the study

72

Complete understanding of the bank and its employee. All the departments
manager who is working in the Kotak Mahindra bank & their work, organization
environment & service knowledge etc.

To find out the marketing related work with the bank with the help of manager of
the Kotak Mahindra bank.

3.2Type of Research: Descriptive research is also called Statistical Research. The main goal of this type
of research is to describe the data and characteristics about what is being studied. The
idea behind this type of research is to study frequencies, averages, and other statistical
calculations. Although this research is highly accurate, it does not gather the causes
behind a situation.
The regular interaction with the Customers and the Line Managers revealed about
the various strategies involved in performing business activities and gathering data using
various techniques and software applications
Descriptive research includes Surveys and fact-finding enquiries of different kinds.
The main characteristic of this method is that the researcher has no control over the
variables; he can only report what has happened or what is happening.

DATA SOURCES
There are two types of data:

PRIMARY DATA
The data that is collected first hand by someone specifically for the purpose of
facilitating the study is known as primary data. So in this research the data is collected
from respondents through questionnaire.

SECONDARY DATA.
For the company information I had used secondary data like brochures, web site of
the company etc.
The Method used by me is Survey Method as the research done is Descriptive Research.

73

3.3SAMPLE SIZE:
The survey is conducted among 155 respondents.
Simple statistical tools have been used in the present study to analyze and interpret the
data collected from the field. The study has used percentile method and the data are
presented in the form of diagrams.

3.4SCOPE OF THE STUDY


This study helps in finding out the satisfaction of most important resource that is
customers of Kotak Mahindra Bank.
The study provides knowledge of various products& investment services of Kotak
Mahindra Bank. The study helps to learn of work culture of organization.
The study of also helps to learn what as the various benefits available to the customers.

3.5LIMITATIONS OF STUDY
The study could not be made that comprehensive due to time constraints. Some
customers feel uncomfortable to reveal some personal information relating to income etc.
it might have happened that some more essential information could have been collected.

Time constraint.

Biases and non-cooperation of the respondents.

Financial constraint.

Geographical selectivity in study limiting to Jaipur city only.

People are not interested in giving personal opinion.

FACTS AND FINDINGS


1. ATM Facility is more widely used by customers belonging to Private/Foreign Banks as
compared to Government Banks.
74

2. Customers value Efficient Service over every other aspect, this is far more important
than the number of ATM machines, Staff, Dcor of Bank.
3. Reputation of Bank is most important when it comes to choosing especially a Private
Bank.
4. The general perception is that Private Banks provides better services as compared to a
Government Bank.
5. People realize that Private Banks are as safe as compared to Government Banks.
6.Advertisements and Freebies can be used to attract more customers.

DATA ANALYSIS AND INTEREPRETATION


Survey Conducted on 155 Respondents

75

DURATION WITH BANK

Less than 6 months; 3%


Over 2 years; 17%

6 months to 1 year; 30%

1 to 2 years; 50%

DURATION WITH BANK


The study of 155 Kotak Mahindra Bank respondents consisted of a majority of
customers who had been with the Bank for a reasonable amount of time. This is good as
these customers have had the opportunity to properly access the service level of the
Bank, and can compare their experiences of Kotak Mahindra Bank with banks they have
previously and are currently dealing with.
Out of the total respondents only 3% have been with the Bank for less than 6 months, the
rest 97% have had the opportunity to know about the strengths and weaknesses of the
Bank.
Another inference that we can draw from this study is that couple of years the Bank has
been actively acquiring new customers as from the survey we can see that about 80% of
the customers have opened their accounts during the past two years. The reason for this
could be that during the past two years the Bank has been able to convince many
prospective customers about the superior service it is able to offer in comparison to
competing Banks.
Another reason could be that the customer base of the Bank has increased due to sheer
word of mouth of the Banks millions of satisfied customers.
1. REASON FOR CHOOSING BANK

76

REASON FOR CHOOSING BANK

Recommended by Family/Friend

Brand Name/Reputation of bank

34%

44%

16%
Branch near Office/Residence

Advertisement

6%

Other Reasons

If the Bank could get to know of that very compelling factor that convinced the customer
to open the account then the Bank could use this in its favor to attract more customers.
From the study conducted the factor which has come out strongest in this regards is the
Other Reasons getting 44% of the responses, going deeper into this response by
asking the respondent what is the factor they include in this Other Reasons is that most
people are not the deciding factor when they open a saving account, this is done so by
their employers. The customers salary accounts are created by the companies in which
they work.

77

3. MOST FREQUENT POINT OF INTERACTIONWITH THE BANK

MOST FREQUENT POINT OF INTERACTION


30
26
25
20
16
15
10
6
5

0
Visit Branch

ATM

Phone Banking

Drop0 Box

Internet Banking

Door0Step

The Banks are very interested to know the most popular Point of Interaction with
the Bank as if the Bank is lacking in one of these steps can be taken to make the situation
better.
From the study we can see more than half (more than 50%) of the total respondents feel
that they interact most with the Bank with the help of ATM. Hence the importance of ATM
cannot be overstated.
The Second most popular point of interaction that arises from the study is the
Branch with 32% of the respondents favoring this option. Kotak Mahindra Bank is unique
in an aspect that it follows the Any Branch Banking wherein the Account holder can
use any of the Banks 156 Branches all over the country.
An aspect that customers really appreciate is the 24 hour Branches and the 365
DaysBranches of Kotak Mahindra Bank. The 24 Hour Branch of Kotak Mahindra Bank
is located at sector 18 Jaipur apart from these Branches in Mumbai and other cities in
India.

78

Kotak Mahindra Bank is the only Bank which has the facility of a 24 Hour Branch. As for a
365 Day Branch the only Bank having this facility apart from Kotak Mahindra is UTIBank.
The third most Frequent Point of Interaction is Phone Banking with 11.5% of the
respondents favoring this medium. Phone Banking is one of the new age Banking
techniques. It is in its infancy in India and people have not taken to it as is the case in
other Developed Countries in the World.
In the study it was seen that customers have mixed feeling when it comes to Phone
Banking as sometimes they do not find it as an effective alternate to traditional forms of
Banking.
The forth most Frequent Point of Interaction with the Bank is Internet Banking with 4% of
the respondents favoring this medium. Internet Banking is the most modern means of
Banking available to the customers but due to the general perception that this medium is
not safe it is not used by many people.
In our study only 60% of the total respondents have at least once used Internet Banking.
The two options which were not favored by any respondents as the most Frequent Point
of Interaction are Drop Box Facility and Door Step Banking.

79

4. OVERALL SATISFACTION LEVEL


OVERALL SATISFACTION LEVEL
30
26
25
20
15
10

14
10

5
0

0
Very Satisfied Somewhat Satisfied
Neither Satisfied nor Dissatisfied
Somewhat 0DissatisfiedVery Dissatisfied

Any service provider would want their customers to have a high Overall
Satisfaction level. Kotak Mahindra Bank has scored very well in this regard.
The most important thing is that no respondent has complained that they are
overall dissatisfied with the bank. This is a very important finding because this shows
the effort Kotak Bank puts in providing their customers a superior service has not gone
waste.
More than half of the total respondents (52%) say that they are somewhat satisfied with
the overall service of the Bank. About 30% of the total respondents say that they are Very
Satisfied with their Overall Experience with the Bank.Hence about 82% of the
Respondents are Satisfied with their Overall Experience with the Bank.
The study is showing a very good Overall Satisfaction Level by the Account holders

5. SATISFACTION LEVEL WITH BANK STAFF


80

SATISFACTION LEVEL WITH BANK STAFF (Courtesy,Qualified)


25

23

20
15

15
10

10
5
0

2
0
Very Satisfied Somewhat Satisfied
Neither Satisfied nor Dissatisfied
Somewhat Dissatisfied
Very Dissatisfied

Banks are institutions which are backed up by a large amount of capital; todays
Banks are spending a huge amount of money on technology, improvement in
infrastructure, etc. But even today the most lasting impact about any Bank comes from
the customers experience with the Bank Staff.
Any paining experience can have a lasting impact on the mind of the customer, this
can force him to change Banks or even discourage others from joining the Bank. Hence
Banks should train their employees to maintain good relations and be cooperative with
the customers.
From the results of the findings we can see that Kotak Mahindra Bank has been
successful in marinating a high level of customer satisfaction with the employees. Only
4% of the total respondents included in the study were dissatisfied.
The number of respondents who were Very Satisfied represented 30% of the total
respondents while those who were Somewhat Satisfied were 46% of the total. The
respondents who were Neither Satisfied nor Dissatisfied are 20% of the total.

81

SATISFACTION LEVEL WITH BANKING HOURS

(10 am to 7 pm)

25
22
20
15

14
10

10

5
0

0
Very Satisfied Somewhat Satisfied
Neither Satisfied nor Dissatisfied
Somewhat Dissatisfied
Very Dissatisfied

6. SATISFACTION LEVEL WITH BANKING HOURS (10 am to 7 pm)


From the analysis of the data that has been collected from Kotak Mahindra Bank
Account holders we can see that majority of the respondents are satisfied with the
Average Banking Hours.
The respondents who are Somewhat Satisfied with the Banking Hours consist of
44% of the total, while 28% of the total respondents studied say that they are Very
Satisfied. In all 72% of the total respondents are satisfied with the Banking Hours of Kotak
Mahindra Bank.
The respondents who are neither Satisfied nor Dissatisfied consist of 20% of total
number studied, while 8% of the respondents are somewhat dissatisfied.

82

7. THE RESULTS OF A GENERAL SURVEY WHICH WAS CONDUCTED ON10


DIFFERENT BANKS IS AS FOLLOWS

BANKS STUDIED

BANKS STUDIED
25

20

20

20

15

10

10

10

10

10

10

This study involved mainly Banks operating in the Private Sector, there are some
Banks from the Public Sector but these are at a relatively lower proportion.
The Private Bank include both Indian and Foreign Banks, the Indian Banks
included ICICI Bank, HDFC Bank While the Foreign Banks apart from Kotak Mahindra
Bank studied included CITIBANK, HSBC, ABN Amro.

83

MOST IMPORTANTANT QUALITY IN A BANK

Number of ATM ; 12%


Courteous Staff; 26%
Efficient service; 62%

From the survey of more than hundred respondents belonging to different Banks we can
to the conclusion that Efficient Service offered by Banks is considered most
important by account holders , 62% of the respondents felt that the Bank should
concentrate more on this service aspect.
The next aspect which is considered highly important by the Account holders of
various Banks is the Staff of the Bank. It is true that todays Banking far less of Branch
Banking as it was the case a few years ago , today Account holders have a constant
interaction with non-human interface like ATM machines , Internet Banking , Drop Box ,
Even phone Banking when customers do not interact in a face to face manner with the
Bank employees.
But in the minds of the respondents it is very important that the Staff the Bank employs
should be cooperative, courteous and qualified to solve the various problems of the
Account holders
. The percentage of respondents favoring Staff quality as most important was 26% of the
entire sample size.
84

The most frequent point of interaction with the Bank is ATM facility, the Account
holders whether in Private/Foreign sector or the Government sector have been provided
with ATM facility by their respective Banks. To judge the performance level of any Bank
today it is crucial that the ATM service of the Bank be studied, this includes not only the
number of ATM machines installed by the Bank , but also how technologically advanced
the machines are (number of transaction that can be done with the ATM Facility), the
effort Bank undertakes to maintain the machines and also the overall experience of the
Account holder with the service.
The percentage of respondent considering the ATM service as most important were
12% of the total sample size.
But from the respondents who were questioned none of them said that the
Dcor/Ambience of the Bank Branch was most important. On further Questioning it
was revealed that they did want well-maintained Branches/Other Bank Interaction points
but this was not the most important aspect.

85

8. PRIVATE BANKS PROVIDE SUPERIOR SERVICES COMPARED TO


GOVERNMENT BANKS?

PRIVATE BANKS PROVIDE SUPERIOR SERVICES AS COMPARED TO GOVERNMENT BANKS ?

N o; 21%

Yes; 79%

The general perception is that the service quality of Private Banks is superior to
that offered by Government sector Banks; we wanted to study whether this is a true
phenomenon or whether this was just hearsay.
The most important findings would come from the group of respondents who hold
Saving Accounts with both Private and Government run Banks, as these people would be
in the best position to judge the service offered by the Banks.
According to this group of respondents the Range of Products that are offered by
Private sector Banks are much more diverse than those offered by Government Banks.
Also these respondents felt that the Banks in the Private sector were much more flexible
than their Government counterparts when dealing with customers were concerned.
Private sector Banks are much more proactive when it comes to offering its customers
new-age methods of Banking like ATM Facility , Internet Banking , Phone Banking, These
services make the life of Account holders much easier.
86

Another major difference that comes to most of the respondents minds when
comparing the Private and Government sector Banks is the Staff Attitude towards the
customers. Sure Private sector Bank Account holders have had problems dealing with
Bank Staff, but they still feel it is much better than how Government employees behave.
These Government employees show as if they are doing a favoring on the customer
when they do their job.
Private sector Bank customers are offered many freebies and incentives to remain with
the Bank, or try new products of the Bank. This is never the case with Government
Banks.
Overall the result of this question very clearly states that people consider the
service level of Private Banks much higher than Government Banks as 79% of the
respondents agree and only 21% of the respondents disagree.

87

SWOT ANALYSIS
Strength
1. Aggression towards development the existing standards by banks.
2. Strong regulatory impact by central Bank to all the banks.
3. Presence of intellectual capital to face the change in implementation with good
quality.
4. Entire range of products for corporate and retail customers.
5. Market segmentation and products for niche segment.
6. Significant presence in Credit cards, Insurance, Mutual funds, Investment
banking, Personal loans and SME sector.
7. Good Banking infrastructure
8. International Presence
9. Huge amount of deposits
10. IT enrichment
11. customer satisfaction
12. continuous profit and growth chart
13. Innovation in most of products
Weakness
1. Poor Technology infrastructure
2. Ineffective risk measures
3. Presence of more number of smaller

banks that would likely to be Impacted

adversely
4. Data, sometimes not supplemented with details on the companys history, key
executives, business description, locations and subsidiaries as well as a list of
products and services and the latest available company statement.

88

Opportunities
1. Increasing Risk management Expertise.
2. Need significant Connection among, business Credit & risk management and
Information Technology.
3. Advancement of technologies. Strong Asset Base would help in bigger growth.
4. When I visited to the market then I saw there is most of the customers current
account in the bank and some are using EDC machine also but there is large
number of shopkeeper have not this facility, so it have to make aware in these
shopkeeper about EDC machine.
5. Improvement in the economic conditions.
6. Increasing purchasing power of large number of middle class.
7. Indias stature as leading IT power.
8. Retail finance and insurance sector.
9. Low penetration of credit cards.
Threats
1. Inability to meet the additional Capital Requirements
2. loss of Capital to the entire banking system due to merger and acquisitions
3. Huge investments in Technologies.
4. As we know that ICICI Bank is leading company in the market and MAHINDRA
KOTAK Bank is competitor of it, so there is very aggressive completion between
these two company so there both companys always watching their strategy,
company share and this both company wanted to cover more and more market so
according to me is a burden for the company.
5. Competition from other banks

89

CONCLUSION
1. Kotak Mahindra Bank is Leading Bank in the country, it provides a variety of products
and services to different segments of customers.
2. The Bank aims to serve customers from teenagers to senior citizens, hence different
products designed to suit specific requirements of the above.
3. Aims to serve all classes of the society from the salaried middle class to the high
income business class. Customers are categorized and segmented according to their
requirements and needs.
For Example, the EDGE Saving Account aims to serve middle class customers so
minimum balance required to be maintained is Rs. 10000. While the PRO and ACE
Saving Accounts are targeted at high income customers, the minimum balance
requirement is Rs. 20000 and Rs. 75000.
4. Customers who are more profitable to the Bank (High Value Customers) are provided
special facilities. Priority Banking is meant to serve these high value customers.
5. The Bank prides itself with the ability to provide differentiate products in the crowed
market of saving accounts. Bank offers the free home baking, special co-branded debit
cards (Smart fill Debit Card) which makes its product unique.
6. The Bank is also involved in marketing activities which serves as a medium of
advertisement for the Bank. These are as follows:

Extended happy hours at certain pubs in Delhi for the Banks account holders.

Gift Vouchers on making utility payments, such as cell phones, electricity and
MTNL bills.

Free Gifts like caps, pens/wollets to its customers.

Free add-on cards for relatives.

90

7. The Bank wants its customers to transact more through Internet Banking and ATM,
Rather than the customers using the branch.
8. The Debit Cards provided by the Bank are Internationally Accepted around the world,
hence giving the customers the convenience to transact anytime, anywhere.
9. The Bank has tied up with other Banks so that its customers can use other Banks ATM
facility for free transactions
10. The Bank also provides DEMAT account and also sells Mutual Funds, this provides
the Bank and Government additional revenue.
11. The Bank has been very successful in enlarging its customer base during the last
couple of years.
12. The Number One Reason of people choosing Kotak Mahindra Bank is the Brand
Name/Reputation of the Bank. Hence it should be careful that the Brand name and
Goodwill the Bank has earned is not diluted.
13. The Biggest competitors of the Bank are ICICI Bank and HDFC Bank and
STANDRAD CHARTERED.
14. ATM Facility is most popular way to transact with the Bank.
15. Overall the customers appreciate the service and products offered by the Bank and
are willing to recommend the Bank to their acquaintances , But more attention has to
paid towards:

Increasing the number of ATM machines.

Improving Internet Banking Facility.

91

RECOMMENDATION & SUGGESTIONS

1. Increasing the number of ATM machines.


2. Improving Internet Banking Facility.
3. Transaction carried out under the service in good faith relying on customer instruction.
4.

Remove any copyright trademark or other proprietary right notice contained in netcard
verified by visa.

5. Bank should be open Sunday and holidays for some hours.


6. Demand draft facility should be available on internet banking.
7. The customer should change his mailing address by internet banking.
8. Cheque book should be issued by the bank for all type of account at without charges.
9. Interest payable on the saving and term deposit account should be increase at the end of
the financial year.
10. Daily minimum/maximum transaction limit should be based on customer account
balance.

92

APPENDIX
QUESTIONNAIRE
NAME ___________________________________________
ADDRESS ________________________________________
AGE
Below 25 years

25 to 40

40 to 55

Above 55 years

OCCUPATION
Business

Professional

Service

Student

Others

ANNUAL INCOME
Less than 1.5 Lakh

1.5 Lakh to 3 Lakh

3 Lakh to 4.5 Lakh

above 5 Lakh
1. DURATION WITH BANK
2. REASON FOR CHOOSING BANK
3. MOST FREQUENT POINT OF INTERACTIONWITH THE BANK

4. OVERALL SATISFACTION LEVEL

5. SATISFACTION LEVEL WITH BANK STAFF


SATISFACTION LEVEL WITH BANKING HOURS
6. SATISFACTION LEVEL WITH BANKING HOURS (10 am to 7 pm)

BANKS STUDIED
93

7. THE RESULTS OF A GENERAL SURVEY WHICH WAS CONDUCTED ON10


DIFFERENT BANKS IS AS FOLLOWS

Dcor of Bank 0%
Efficient service 62%
ATM 12%
Courteous Staff 26%

8. PRIVATE BANKS PROVIDE SUPERIOR SERVICES COMPARED TO


GOVERNMENT BANKS?
Yes
No

94

BIBLIOGRAPHY
There was immense need and flow of the information while conducting the analysis
as well as while writing the thesis report, which was gathered through various sources
mentioned below:
6. Various Magazines and Newspapers such as
Outlook
Financial Times
The Economic Times
The Times of India
The Hindustan Times
7. Other References
Questionnaires, Journals, Broachers and various other documents gathered and
collected from bank and various other sources such as ATM centers and associates.
8. Internet
www. Kotak Mahindra Bank. com
www. Kotak Mahindra Bank.co.in
www.google.com
www.economictimes.com

95